What is Economic Interest Group Theory

It often happen that a few industry players end up getting favours from the government by liaison and campaigning and this end up ignoring the interest large group small players in unorganized sectors of the industry. So it becomes important for the government to respond to the interests of this large group of players. For this purpose the government comes up with new laws and provisions that are helpful to the small players in the industry and having right kind the control over the few big firms in the market. This practice strengthen government efforts at bringing more transparency and availability of vital and critical information regarding the social and environment costs and efforts made by the big corporations. This results into a discriminatory positive policy and regulatory response from the government that at the same time ensures and protects the interests of the large number of small players and bringing in right kind of information about the activities and costs relating to social and environment causes as well as efforts by the industry players.

Though the interest of large numbers of small players is important for the industry but the discriminatory attitude and rules end up causing huge problems for the big players and they find it difficult to sustain their business and growth as the burden of the whole industry is almost transferred to them while they have access to limited market. This works as negative incentive for the corporations. So the government should avoid any such moves.

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