The Impact of Organized Interests on Eligibility Determination: The Case of Veterans' Disability Compensation

Abstract

A bureaucracy has a profound impact on public policy when it determines eligibility for government programs. Organized interest groups can increase the amount of information the target population has about the program, help applicants with their applications, and work to inform policy makers when the process is not working well. By doing these things, interest groups can affect how government programs are implemented. In this paper, we investigate the influence of veterans' interest groups on eligibility determinations in the Veterans' Disability Compensation (VDC) program across the fifty U.S. states to determine whether variations in veterans' organizations can explain why VA programs are implemented differently across the states. We find that the strength of veterans' groups affect demand for, access to, and effectiveness of the Veterans' Disability Compensation program. In states where veterans' groups have greater resources, more veterans file claims, more applications are approved, and, interestingly, the Veterans' Administration makes fewer errors in their eligibility decisions. We find no evidence, however, that the strength of veterans groups explain variation in the number of claims that are appealed, the percent of claims that are pending over 120 days, or the average disability rating given to successful claimants.