Allocating Lobbying Resources between Collective and Private Rents

Abstract

How do firms allocate their lobbying resources among their political goals? The authors approach this question using a game-theoretic model that integrates three concepts from the lobbying literature: the distinction between private and collective rents, the competition for a rent, and the impacts of political institutions. The model indicates how competition and political institutions affect lobbying expenditures and expected net returns for private and collective lobbying. The outcomes predicted differ with those of past formal models and produce the counterintuitive expectation that competition typically reduces expenditures. The authors test the model's predictions by examining the lobbying decisions of sixty-two firms.

Assessing business advantage in Washington lobbying

“…9 The success business enjoys when it is unopposed does not appear to be driven by its pursuit of private benefits; only three of the nine issues on which business is unopposed involve policy benefits of this type. Although research has shown that business interests are very active in pursuing private policy ends (Hansen et al, 2005;Godwin et al, 2008Godwin et al, , 2012, very few private benefit issues were included among the 98 sample issues. If the sample had included more regulatory issues, more private issues would no doubt be apparent (see Godwin et al, 2012).…”

The determinants of direct corporate lobbying in the EU: A multi-dimensional proxy of corporate lobbying

“…in lobbying dynamics within determined manufacture industries, Godwin and Seldon, 2002) and then into broader approaches (e.g. Hansen et al, 2005;Lowery et al, 2008;Ozer and Lee, 2009;Godwin et al, 2008). In fact, ceteris paribus (i.e.…”

“…Ozer and Lee, 2009;Hansen et al, 2005;Godwin et al, 2008) emphasise the importance of the division between public and private goods. Private rents impart benefits to a single actor exclusive of others, whereas collective rents are non-excludable, namely benefits are evenly allocated amongst a group of actors (Hansen et al, 2005).…”

“…Ozer and Lee, 2009;Hansen et al, 2005;Godwin et al, 2008) emphasise the division between private and public rents delivered by the political system as a determinant of corporate political action. In a rent seeking system, such as American lobbying, the operationalisation of this concept is troublesome, but feasible.…”

Environmental Lobby Effectiveness ‒ The Case of Lithuania and the United Kingdom

“…Another important difference between corporate and non-corporate lobbying activities is that firms can choose their activities based only on the expected profit of achieving their lobbying target. Many other organizations have to lobby on the fields where their efforts are most likely to have the greatest policy or other effect 50 .…”