John Mark Hansen has proposed an explanation of how interest groups ov
ercome the free rider problem: ''political success'' leads to governme
nt subsidization, which allows groups to solve the free rider problem
by reducing the costs of organization and by providing the public good
pursued by the group. The authors show that this argument is contradi
cted by the ''union substitution'' hypothesis developed in labor econo
mics and propose a solution to the subsidization effect based on corpo
ratist practices in Europe.