Off the top of my head, Mancur Olson's book 1982 The Rise and Decline of Nations is one of the better explanations. It's a formal modeling of lobbying and inte

Off the top of my head, Mancur Olson's book 1982 The Rise and Decline of Nations is one of the better explanations. It's a formal modeling of lobbying and interest groups. The incentive structure is such that small groups capable of action can easily push for their specific interests, exceptions, loopholes, and other private goods. Whereas, the general public, which in general would prefer simplified and rationalized laws that treat everyone equally, has a hard time mobilizing to protect their interests because of their size and diffuse character. Wikipedia summarizes the core of the argument: The idea is that small distributional coalitions tend to form over time in countries. Groups like cotton-farmers, steel-producers, and labor unions will have the incentives to form lobby groups and influence policies in their favor. These policies will tend to be protectionist and anti-technology, and will therefore hurt economic growth; but since the benefits of these policies are selective incentives concentrated amongst the few coalitions members, while the costs are diffused throughout the whole population, the "Logic" dictates that there will be little public resistance to them. Hence as time goes on, and these distributional coalitions accumulate in greater and greater numbers, the nation burdened by them will fall into economic decline. http://en.wikipedia.org/wiki/Mancur_Olson http://en.wikipedia.org/wiki/Mancur_Olson So, the idea is a kind of 'death by a thousand cuts' where each little loophole or exemption is not so large that the public will rally against it, but the cumulative effect of interest groups ends up creating a byzantine system of laws which become unintelligible and hold back growth. Politicians, while running under the banner of broad ideologies, know that their practical support comes from smaller groups capable of mobilization (whether it's financial contributions or unions getting out the vote). So, interest groups win out over the general public interest.