A Study on the Role of the Interest Groups and their Impact upon Business Environment Policy Making

In this paper, the role and impact of the interest groups particularly protective internal one upon public policy making for business environment is studied through analytical comparative method. Firstly, definition and different types of the interest groups are introduced in brief. Interest groups in this articles refer to those kinds of groups which try to influence upon public resources allocations without taking political power directly. Also, it was mentioned that in general, there are two major types of interest groups: internal interest groups and external one. First types of interest groups have close relationships with government and they are recognized by that. The second one does not have direct connections with government and government has no tendency to recognize them. Then, the mechanism of protective interest groups influence upon public policies in different organs of government also is mentioned by using descriptive and comparative methods. Interest groups’ role and impact upon three branches of government during the formulating, assessment and implementation of public policies is reviewed. It was mentioned that in recent centuries’ governments have taken very major responsibilities in substantial public policy areas such as providing health services, educations, welfare of individual citizens, controlling and regulation of money, business and economy and so on. Because of that governments have become more powerful than before. At the same time, democratic sentiments were risen and ideal of bottom-up approach to governance encouraged political parties and interest groups to participate in governance. Nowadays, governments are not the only policy makers and political parties along with different types of interest groups that take part. In this paper, public policy making cycle is divided to five stages. First, formation of policies or legislative proposals. Second, formulation of policies or legislative proposal in the form of bill or representative proposal. Third, deliberation and enactment of public policies. Fourth, implementation stage, and the last one is called impact assessment stage. It is emphasized on the advantages of interest groups participation in all stages of public policy making and stressed that government and interest groups interactions in the course of policy making process is essential. Interest groups attempt to influence public policies through lobbying political official in executive power or parliamentarians during the deliberation and enactment process in parliament, respectively. If they failed to achieve their wishes through aforementioned stages, i.e., formation, formulation, deliberation and enactment stages in executive power and parliament, they try to do so by influencing courts. However, impact upon policies in courts are expensive and difficult and it depends on the extent of judiciary independence in a given country. Despite many advantages of interest groups’ participation in public policy making, there are some cautions here; hyper active interest groups which have better access to policy makers in different branches of government may produce inequality amongst citizens. Apart from that, interest groups may mislead public policy makers through providing incorrect information or false data. They may do it in favor of themselves against public interest. The most dangerous of all, if powerful interest groups dominate main public policy maker institutions, particularly parliament, they may disappoint citizens and eventually undermine legitimacy of political system as a whole. This paper shows that if some requirements and standards be satisfied, participation of interest groups could enrich the content of public policies and prevent the hasty decision making and therefore, avoid harmful policy decisions. Interest groups participation is desirable in cost and benefit analysis. They are very rich sources of information and data. Usually they seek to provide the required data and information during policy making process free of charge. They also have many experts which can help policy maker to assess the impact of decisions and policy before and after implementation of them. It is claimed that in this circumstances the transaction cost would in part be diminished. Lastly, the necessity of interest groups participation in policy making process in Iran is studied and some recommendations are provided on the basis of the foreign countries experiences. Unfortunately, due to weak participation of different entities such as political parties and interest groups, public policies’ quality, especially in business environment area in Iran, are not high enough. Encouraging citizens to engage in public policy making process in different phases of policy making process may stop this trend and help policy makers to make better decision. Participation of interest groups not only can promote government’s policy making functions, but also, can improve legitimacy of political system which has damaged recently because of economic crisis which has deep root in weak policy making in business environment in last decades. This paper takes preliminary steps toward better policy making through encouraging participation of interest groups as one of main actors in public policy making process.