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RESEARCH & IDEAS

Power to the People: TheUnexpected Influence of SmallCoalitions

Published: December 12, 2012 Author: Kim Girard

J. Gunnar Trumbull discusses his newbook, Strength in Numbers, in which he arguesthat diffuse groupsenvironmentalists,consumer activists, farmerswield great

influence in areas of regulation including tradeto product safety and labor policy.

Harvard Business School Professor J.Gunnar Trumbull balks at the ubiquitous ideathat the concentrated power of a few billionairescontrols public policy and governmentregulation. Exaggeration of the impact of big

business on public policy, he says, comes at ahigh price, leading to a deep, widespreadskepticism for the possibility of fair regulation.The power of big business is limited by theneed to work with a range of powerful butdiffuse societal groups.

In his new book, Strength in Numbers: The Political Power of Weak Interests , Trumbullargues that diffuse groupsincludingenvironmentalists, consumer activists, women'sorganizations, health-care advocates, andfarmerswield great influence in areas of regulation including trade, product safety, andlabor.

Read an excerpt from the book ."It's important to pay attention to how

regulation is made," says Trumbull during arecent interview. "The start of properlyregulating the economy is to understand howregulation is made, and this means forgettingwhat we thought we knew about the weaknessof groups."

A consumer policy expert, Trumbull wroteStrength in Numbers after nearly a decade of research into sectors that shaped modernconsumer society: agriculture, retail,

pharmaceuticals, and the credit industry in post-World War II Germany, France, Britain,and the United States.

In postwar Europe and the United States,the consumer protection idea "emerged out of

nowhere, and it ended up being one of the mostintensive areas of regulation," he explains. Inmost cases, new regulations emerged from

political coalitions forged between specificindustries and groups of activist consumers.

Questioning theunquestioned view

Trumbull nods in agreement when askedwhether his ideas are controversial. That'slargely because he is at odds with the theoriesof economist Mancur Olson, whose 1965 book,The Logic of Collective Action: Public Goodsand the Theory of Groups , sparked a generationof political scientists and regulation theorists,including George Stigler, Sam Peltzman, andRussell Hardin.

A University of Maryland professor at thetime of his death in 1998, Olson believed that

big corporations and industry organizationswielded control over policy. Diffuse groupscould not effect policy change becauseindividuals within the group did not have asufficiently large financial or social stake in theoutcome, Olson argued. "It became thedominant, unquestioned view," Trumbull says.

Olson's beliefs have been popular with bothliberals and conservatives, he observes. Liberalsroutinely believe that big banks andcorporations control government policy, even if they're not happy about it. Conservatives favor less regulation of business, so they are eager toaccept that advocacy groups have little controlover public policy. But since the Second WorldWar, Trumbull notes, a pro-business policyapproach has given way to a stronger postwar

regulatory environment powered by new kindsof groups and coalitions in the United Statesand Europe.

Within this new scenario, three groups playunique roles: policymakers who identify anduse groups for support; companies thatunderstand the interests of diffuse groups andtap them to reap larger profits or break into newmarkets; and activists who organize aroundinterests to gain more public influence. Thekeys to success lie in the coalitions that canform between industry and activists, industryand the government, and social activists and the

government, Trumbull says.

Proving the strength of diffuse groups

Take France for example. For years,organizations that formed outside the Frenchgovernment were widely considered "suspect"and not allowed to speak in the public interest.

But by the late 1970s, "numerous, dynamic, andincreasingly well-funded consumer groupsemerged," Trumbull says. By 1980, France hadmore than a 1,000 local consumer unions taking

price surveys, organizing product boycotts, and providing consumer remediation services.

"The start of properlyregulating the economy is tounderstand how regulationis made, and this means

forgetting what we thought we knew about theweakness of groups."

France's consumer groups provided benefitsto both members and nonmembers, negotiatingadvertising and product standards. "Frenchconsumer groups cultivated membership not by

providing selective benefits, but byemphasizing their public purpose," Trumbullwrites.

French consumers also fought for

bankruptcy reform and interest rate caps."These measures were not put in place becauseof the concentrated lobbying power of France'sconsumer lending sector," Trumbull says.Instead, French politicians worked closely withindustry and family groups to developregulations that promoted economic and socialinclusion.

In the United States, time and again, strong policy narratives (such as the recent Occupymovement's move against "greedy" bankers)and interest group coalitions (such as the SierraClub's and Greenpeace's environmental causes)

have helped groups overcome theorganizational challenges inherent to their largesize, Trumbull says.

In the United States and France, largegroups of farmers have worked with

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government to promote agricultural interests,says Trumbull, noting that the sector includes

both small and large farms on the left and rightof the political spectrum, all producing different

products. In the book he cites France's NationalFederation of Farm Worker Unions (FNSEA);in 2006 FNSEA chief Patrick Ferrre said,"When the French Minister for Agriculture,whatever his political affiliation, wants tolaunch a reform or a new policy, he will meetwith FNSEA's leaders and ask them their advice. We have a natural authority."

In retail, Trumbull found more evidence thatdiffuse groups impact outcome, comparingretail policy in France and Germany.Mom-and-pop stores in both countries have

faced the threat of large retail chains that couldundercut them on price and convenience. InFrance, small retailers organized aggressivelyagainst the big stores. A coalition emerged as aresult of the work between the small retailersand the country's existing consumer associations.

In Germany, small retailers were lessorganized, but they won the fight, too. Theretailers allied with the country's powerfulservice-sector trade union, which representedmany retail employees who were fightingagainst working evening hours. Coalitions largeand small were key to both wins, Trumbullobserves.

Trumbull says he hopes the research will

open up new areas of study, moving away from"narrow points of access to policy influence"toward "coalitions grounded in the publicinterest."

There is room for the left and right to work on complex regulatory issues through the filter of government agencies, industry, and user groups, he says. "Coalitions put limits ondemands. The moderating effect is reallyimportant."

About the authorKim Girard is a writer in Brookline,

Massachusetts.

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