research articles Issue Networks, Information, and Interest Group Alliances: The Case of Wisconsin Welfare Politics, 1993–99 Michael T. Heaney, University of Chicago abstract Interest group scholars have long emphasized the importance of group alliances in the policymaking process. But little is known about how groups choose specific alli- ance partners; that is, who works with whom? Social embeddedness theory suggests that the social location of groups in issue networks affects the information available to them about potential partners and the desirability of particular alliances. To test this hypothesis, I use data from interviews with representatives of 57 interest groups and 46 other significant political actors involved in Wisconsin’s 1993–99 welfare policy debate to model alliance formation with two-stage conditional maximum like- lihood regression (2SCML). I find substantial support for my social embeddedness hypotheses that alliance formation is encouraged by previous network interaction, contact with mutual third parties, and having a central position in a network. In short, the placement of groups in networks serves to facilitate alliances among some pairs of groups and to cut off potential connections among others. The last quarter century has witnessed an explosion of interest group formation and participation in policymaking at the state and national levels in the United States (Baumgartner and Jones 1993; Berry 1999; Gray and Lowery 1996). As interest group communities have become larger and more complex, individual groups may find themselves to be less influential than in the past (Salisbury 1990). This crowding of interest communities has led groups to devise new strategies to gain policymaking influence. Forming alliances with other groups is one such strategy. Groups that once tended to operate independently now find that a scarcity of resources and increased competition leads them to seek out alliances (Baumgartner and Jones 1993; Gray and Lowery 1998). Alliances allow groups to demonstrate better the State Politics and Policy Quarterly, Vol. 4, No. 3 (Fall 2004): pp. 237–270 238 heaney strength of support for their policy positions to policymakers, to pool re- sources, to share information, to calibrate carefully the degree of their involve- ment on a range of issues, and even to hide their involvement on some is- sues from selected audiences (Hula 1999). Scholarship on interest group alliances has focused on the knowledge groups have of potential allies and adversaries in their environment (Heinz et al. 1993), the extent to which alliances are a response to scarce resources (Gray and Lowery 1998), the roles that groups choose to play in alliances (Hula 1999), and the importance of a group’s reputation in determining its behavior in an alliance (Hojnacki 1998). Hojnacki (1997) modeled the alli- ance decision as a cost-benefit calculation in which groups weigh the benefits of alliance formation (e.g., increased efficacy, conservation of scarce re- sources) against its costs (e.g., reduction of autonomy, loss of distinct iden- tity). But while scholars have generated a substantial body of knowledge about alliances, they have yet to shed much light on how groups decide to form specific alliances. Given the increased crowding of interest group environments and the prevalence of alliances, the important question is no longer whether groups are likely to form alliances, but with whom they are likely to work and why. As Hula (1999, 6) opined, “[t]he next step in understanding coalition behav- ior is the development of a model that can predict which groups will work together, why they coalesce, what their alliances will look like, and when these alliances will arise.” Such a model would recognize that when groups make alliance decisions, they do not choose to develop an alliance as an abstract strategy, but rather they make choices about specific alliance partners from the set of other groups in their interest community that are interested in a specific policy issue. A group’s alliance decisions are conditioned on wheth- er the set of potential partners is large or small and the extent to which those partners are also interested in allying with the group. I model alliance formation as the product of interactions among dyads of groups in an issue network. A network is a mechanism through which groups exchange information about potential alliance partners, build trust, and establish the reputations that become the currency of alliance relation- ships. My research design identifies a series of related events surrounding a single episode of policy change, and I use these events to examine the pro- cesses through which groups form and dissolve alliances. My data are drawn from my interviews of interest groups’ leaders and other political actors in- volved in the 1993–99 debate over welfare policy in Wisconsin. I measure the embeddedness of these interest groups, which is the extent to which individ- uals and institutions are intertwined in “ongoing social relations” (Granovet- fall 2004 / state politics and policy quarterly 239 ter 1985, 482). I find that the social embeddedness of a group in the interest community significantly influences who it chooses as alliance partners. Con- nectedness in social networks helps to forge alliances, while the lack of so- cial connections blinds groups to potentially profitable partnerships. information, embeddedness, and alliance decisions The notion that issue networks are the institutional context within which public policy is made in the United States is now widely accepted (Gais, Peter- son, and Walker 1984; Heclo 1978; Kingdon 1984; Thatcher 1998). Scholars have explored the construction of issue networks by examining the circum- stances under which network ties form among interest groups (Browne 1990; Esterling 1999; Hojnacki 1997) and between groups and legislators (Hojnacki and Kimball 1998; Kollman 1997) and the conditions under which legisla- tors prefer group ties to party ties (Hansen 1991). But while these studies have used networks as a metaphor, they have not applied rigorous network theo- ries and methods in their analyses. On the other hand, Laumann and Knoke (1987) and Heinz and his col- leagues (1993) have focused explicitly on describing network patterns, com- paring patterns across policy domains, and suggesting associations between networks and other variables. Fernandez and Gould (1994) used Laumann and Knoke’s (1987) data to demonstrate that government agencies reap the advantages of brokerage in communication networks only when they main- tain neutrality on policy issues, which allows them to be seen as honest bro- kers, rather than advocates. In a series of methodologically innovative arti- cles, Carpenter, Esterling, and Lazer (1998, 2003, 2004) used the same data to examine contact-making in networks as a product of strategic interest group behavior. They showed that lobbyists are more likely to hear new in- formation through weak network ties (Carpenter, Esterling, and Lazer 1998), but the dynamics of high-information-demand environments cause lobby- ists to invest more time building strong ties than weak ones (Carpenter, Es- terling, and Lazer 2003). Carpenter, Esterling, and Lazer (2004) explained that mutual third parties broker relationships between lobbyists, thus demonstrat- ing the importance of the microstructures of networks in affecting interest group behavior. Network analysis scholarship has the potential to inform answers to the causal questions raised by scholars of interest group alliances. In particular, the question of which groups work together can be thought of as a matter of why network structures change over time. I propose a theory in which issue 240 heaney networks serve as the informational context in which decisions about alli- ances are made. Interest groups use the information they acquire through their interactions in issue networks to make decisions about alliances, which in turn reshape issue network structures. Thus, alliance formation is an en- dogenous process of forming and re-forming issue networks. This approach addresses the questions posed by political scientists about interest group al- liances by using the theories and methods developed by sociologists for study- ing other social networks. Alliances are partnerships formed by interest groups for the purpose of working together in the advocacy arena to achieve mutual objectives (Hojnac- ki 1997). Typically, alliances are not legal arrangements, but are negotiated informally among groups. They may be created for planning strategy, meet- ing jointly with legislative staff, funding political advertising, or developing research and intelligence. Alliances almost always involve the confidential exchange of information about upcoming political events. A particular alli- ance may focus on a single issue or event (such as blocking the passage of a particular bill) or a range of issues and common group interests. Thus, alli- ances may be ad hoc, short-term arrangements, or they may persist over time, depending on the mutual interests of the parties involved (Hula 1999). When an interest group is faced with decisions about with which other groups it should propose an alliance, it must cope with a variety of informa- tion problems.1 Given that groups have limited information about potential alliance partners, they must make decisions under conditions of uncertain- ty. This information is also asymmetric, since each group possesses private information about how it will act in an alliance