Lobbying or Pressure?

Abstract

As observed in Chapter 2 interest groups typically use several means to influence government policy. For instance, interest groups may use words (threats) to convince a policymaker. However, when such threats are not successful, it becomes necessary for the interest group to carry out the threat in order to influence policy. Casual observations suggest, just like the quote above, that especially newly organized (starting) interest groups first have to show their teeth, like a strike in case of a union, before they arrive at an established position. Interest groups with an already recognized position, on the other hand, typically seem to rely on verbal persuasion and informal contacts. In the present chapter we try to provide a rigorous game-theoretical underpinning for these observations obtained from casual empiricism.

Unlike the situation today, workers involved in strikes over wage increases in the 1880s were typically not members of a secure union with recognized bargaining rights. Instead, the outcome of the strike determined their collective bargaining status. In modern [..] terminology, we interpret strikes over wage increases in the 1880s as primarily strikes over ‘union recognition’. The main question resolved by strikes was whether the employer would recognize employees’ bargaining power. Card and Olson (1995, p. 33)

This chapter draws heavily from Sloof and Van Winden (1998).