Repeated Lobbying by Commercial Lobbyists and Special Interests

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Using a model of repeated agency, we explain previously unexplained features of the real-world lobbying industry. Lobbying is divided between direct representation by special interests to policymakers, and indirect representation where special interests employ professional intermediaries called commercial lobbyists to lobby policymakers on their behalf. Our analytical structure allows us to explain several trends in lobbying. For example, using the observation that in the U.S. over the last 20 years policymakers have spent an increasing amount of their time fundraising as opposed to legislating, we are able to explain why the share of commercial lobbyist activity in total lobbying has risen dramatically and now constitutes over 60% of the total. The key scarce resource in our analysis is policymakers' time. They allocate this resource via implicit repeated agency contracts which are used to incent special interests and commercial lobbyists to provide a mix of financial contributions and information on policy proposals. These implicit agency contracts solve both an information problem in the presence of unverifiable policy information and a contracting problem in the absence of legal enforcement. These repeated relationship, that are often described using the pejorative term cronyism in the popular press, may in certain circumstances be welfare improving. Terms of use: Documents inJEL-Codes: D720, D780, D830, H110, P160.

Repeated Lobbying by Commercial Lobbyists and Special Interests

“…This case is similar to Groll and Ellis (, ) where by assumption all political access would be allocated to commercial lobbyists. There only commercial lobbyists engage in observable lobbying efforts and guaranteed donations.…”

“…This differs from Groll and Ellis (, ) where commercial lobbyists crowd out citizens and are the only ones who gain political access. Their setting allows solving the system of equilibrium equations with its recursive structure.…”

Exit Strategy: Career Concerns and Revolving Doors in Congress

“…Congressional staff members play a vital role in policymaking in Congress (Salisbury and Shepsle 1981; Loomis 1988; Romzek and Utter 1997). Because of the significant increase in congressional workloads (Curry 2015) and perpetual need for fundraising and campaigning during congressional sessions (Lee 2016), members’ time for policymaking has become more scarce (Groll and Ellis 2017). Despite these challenges, the number of congressional staffers has been declining since the early 1990s.…”

“…Congressional staffers, despite being influential and having some degree of autonomy in their activities (Loomis 1988; Romzek and Utter 1997; Whiteman 1995), are not free agents. Although it is true that most individual member’s attention to policymaking has declined as a result of the electoral environment and other factors (Curry 2015; Groll and Ellis 2017; Lee 2016), which has increased staffers’ ability to engage in entrepreneurial behavior and affect policymaking (Montgomery and Nyhan 2017), members’ reelection incentives certainly increase their interest in assuring that policy appearing to give favors to a specific interest group or a lobbying firm is not pursued in their name.…”

Strategic Legislative Subsidies: Informational Lobbying and the Cost of Policy

“…One of our model’s extensions highlights that if an interest group has to bear the cost of both information and policy implementation, then the lobby’s optimal strategy is to provide transfers to the policymaker in stages and not commit all resources up front as is common in costly access models (Austen-Smith 1995, 1998; Lohmann 1995; Cotton 2009, 2012). 10 We also illustrate how informational lobbying and legislative subsidies arise endogenously and can be either substitutes (Bennedsen and Feldmann 2006; Dahm and Porteiro 2008a, 2008b, Groll and Ellis 2014, 2017), complements (Austen-Smith 1995, 1998; Lohmann 1995; Cotton 2009, 2012), or independent.…”