Antitrust Policy and Interest-Group Politics

A fairly standard characterization of how geographically based representative democracy works in practice suggests that legislators receive a higher payoff from promoting local interests than from taking vague positions in support of economic efficiency or the "national interest." For example, individual legislators work hard to attract military construction projects to their states and districts (and strongly oppose decisions to close existing facilities) not because such spending programs are social welfare maximizing, but rather because they generate direct benefits for their own constituents, while the cost is borne by the general taxpayers, most of whom reside--and vote--in other jurisdictions. ¹ Antitrust policy is not fundamentally different in this regard. Given that private firms, who have incentives to use antitrust processes to obtain protection from competitive market forces, are also in a position to provide political support (votes, campaign contributions, and so on) to their elected representatives, these representatives have strong incentives to supply such protection. The individuals sitting on congressional committees having budgetary and oversight responsibilities with respect to the Federal Trade Commission and the Department of Justice are particularly well situated to influence these agencies to adopt law enforcement strategies that selectively benefit the firms and industries located within the boundaries of their own districts and states.

Writing in 1969, Richard Posner advanced such an "antitrust pork barrel" hypothesis with respect to the FTC. ² Posner charged that the commission was significantly impaired in its task of promoting the public interest by its dependence upon Congress. He emphasized that each member of Congress is obligated to protect and further the provincial interests of the citizens of the jurisdiction he or she has been elected to represent. Specifically, "the welfare of his constituents may depend disproportionately on a few key industries. The promotion of the industries becomes one of his most important duties as a representative of the district." Moreover, because congressional authority regarding the commission's budget and confirmation of political ap

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