Collective action refers to the action taken by a group of people in a specified area to achieve certain common objective and enhance the social, political and economical condition of the people of a particular society. It is an economic theory, concerned with the provision of public goods, with an initiative of two or more individuals on the impact of externalities of group behavior.
On the other hand, the term collective action problem describes a situation under which the multiple individuals will get the benefit from a particular action. This means, the financial burden of each individual action can be shared among individuals. However, unlike any other practice, it provides more benefits to the poor. This is because, the poor individuals have very little options or roles in decision making or anything, at the same time whatever the total outcome of the collective action, can be shared among the poorer, without contributing anything in return.
The interest groups are a group of people, who seeks the interest of the public policy, on the basis of a common interest or concern. An interest group is a body which influences various forms of advocacy in order to influence public opinion or policy.
The two principal functions of interest groups are representation and education. Interests of different groups are protected by interest groups by adopting appropriate influential strategy. They play an important role in creating and mold public opinion. By using different means of propaganda and communication to get the goodwill of the public opinion and mold the administration in their own favour. They also help the people during the time of natural calamities and related situations.
In short, they deserve appreciation for spending large amount of money and effort for the welfare of the public through various people friendly activities.