On the Economic Theory of Interest Groups: Towards a Group Frame of Reference in Political Economics.

This paper evaluates the development of the economic theory of interest groups. Although there is important progress, many substantial lacunae in our knowledge exist. I argue that part of the problem is the way Public Choice theory developed. Methodological individualism has led to an overindividualized ("a-social") view of human behavior. Furthermore, the importance of imperfect information has been underexposed. Acknowledging the essentially social character of human behavior and the lack of information leads to the conclusion that a more prominent place should be given to the role of social groups. A shift towards a "group frame of reference" is advocated. Copyright 1999 by Kluwer Academic Publishers