Goldman School of Public Policy - University of California, Berkeley

Working Paper Series

Interest Groups on the Inside: The Governance of Public Pension Funds

Authors

  • Sarah F. Anzia, Goldman School of Public Policy, University of California, Berkeley
  • Terry M. Moe, Stanford University

History

  • Goldman School of Public Policy Working Paper (September 2017)

Abstract

This paper explores an important dimension of interest group activity—the role of groups as inside players within government—that was central to the literature decades ago, but hasn’t attracted the kind of attention and research from modern political science that it warrants.  Here we aim to advance this agenda by targeting a governmental arena of great significance for the nation: public-sector pension funds.  These funds control trillions of dollars, have vast fiscal and social consequences, and are commonly designed to give public employees and their unions—the systems’ beneficiaries—official insider roles in governance.  We develop a theory arguing that employee representatives can actually be expected to favor policies that undermine the fiscal integrity of their own pension plans.  Our analysis of decisions by 109 pension boards, 2001-2014, supports this expectation—and indicates that, for public pensions, “interest groups on the inside” wield influence that weakens effective government.

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