Organizing dispersed interests

The brokering of political forces is often biased against dispersed interests. A trade regime may display protection even though many may lose from it, since the interests of those benefiting from it are more concentrated and thus more easily organized. Or policies may show an urban bias because the rural population is less vocal and has more difficulty organizing itself. Or the civil service may be overstaffed or overpaid because civil servants have a good grip on the policy process.

Institutions face challenges in organizing dispersed interests even if the counter-interests are not concentrated. Recall Mexico City: 20 million people benefit from air quality improvements, but there are also millions of polluters (vehicles, households, and firms). The collective action to generate institutions for air quality improvements may represent a tremendous challenge even when the interests of polluters are dispersed as well.

Protecting air quality requires coordination beyond what the market would accomplish unassisted. But how is this coordination accomplished? In many contexts a government intervenes with taxes and regulations. But in many others, coordination is accomplished without state intervention. Communal grazing grounds and irrigation systems are managed, sometimes well, by village norms and councils.²⁹ What is the process that enables such coordination?

Freedom of expression and association, trust, and political accountability provide some institutional machinery to coordinate dispersed interests, both in picking up signals and in giving them balance. Democratic institutions and the popular vote, despite many weaknesses, lower the costs of coordinating dispersed interests (see boxes 3.4 and 3.8).