On the economic theory of interest groups: Towards a group frame of reference in political economics

This paper evaluates the development of the economic theory of interest gro ups. Although there is important progress, many substantial lacunae in our knowledge exist. I argue that part of the problem is the way Public Choice theory developed. Methodological individualism has led to an overindividual ized ('a- social') view of human behavior. Furthermore, the importance of i mperfect information has been underexposed. Acknowledging the essentially s ocial character of human behavior and the lack of information leads to the conclusion that a more prominent place should be given to the role of socia l groups. A shift towards a "group frame of reference'' is advocated.