Pressure Groups and the Pattern of Tariffs

Abstract

An economic theory of the effectiveness of industrial pressure groups in obtaining favorable tariffs is developed and tested for the United States Tariff Act of 1824. Import duties bestow nonexclusive benefits on factors of production or costs on product users. From the theory of public goods, it is postulated that small, homogeneous, geographically concentrated groups would react more intensely to the expected effects of tariffs in attempting to influence the legislature. However, in Congress (where majority support was necessary) it was a disadvantage for an import duty to be identified as too local or narrow an interest. This paper attempts empirically to sort out these conflicting forces, and finds inter alia that the ideal industry pressure groups in 1824 had low proprietorial income shares and geographically concentrated production units, but that political effectiveness required the group to speak for many establishments with output spread fairly evenly across states.