Public affairs practice and lobbying inequality: Reform and regulation of the influence game

Although vigorous lobbying by groups within society is essential for the functioning of democracy, it is widely perceived that resource‐rich groups, particularly corporations, enjoy unfair advantages and influence. This perception damages public trust in the efficacy of civic participation and the legitimacy of policymaking. This problem intermittently leads reformers and scholars to assess and develop policies that might assist in addressing lobbying power imbalances. This paper takes up Moloney's call for exploring ways of intervening in the communicative economy to directly address the problem of lobbying inequality. It considers the extent of lobbying inequalities and theoretical frameworks for understanding how resources enable an influence advantage, before assessing the types of regulatory approaches that have been used by democratic institutions. Voluntary measures that could be taken by the corporate sector and professional associations are considered, alongside the current interest in using digital platforms to identify inequalities and incorporate public preferences as a variable in allocating lobbying resources.     

Organized interests and administrative rulemaking: the state of Wisconsin's lobbyists and coalitions

This study examines interest groups undertaking lobbying activity focused on administrative rulemaking. The analysis utilizes a dataset composed of observations made during the 2009–2010 Wisconsin Legislative Session, including the entire population of groups lobbying during this time period. This research examines the participants, efforts, and coalitions utilized when groups engaged in lobbying activity related to rulemaking. Although scholars have examined interest group activity focused on rulemaking at the federal level, little work has focused on this behavior in the states. This study aims to further the understanding of this activity. Copyright © 2015 John Wiley & Sons, Ltd.     

Corporate lobbying and political contributions and their effects on tax avoidance

This study looks at the impact of U.S. lobbying and political contributions on taxes avoided by U.S. publicly traded corporations. Previous research provides mixed conclusions about the effects when examined separately. Looking at political contributions and lobbying contributions simultaneously displays the larger picture. I find that lobbying expenditures and political contributions both lead to lower future taxes, but those political contributions are more effective in reducing taxes paid from what would be expected given the federal statutory rate. This study contributes to the literature in several ways. First, it provides empirical evidence on the positive effects of lobbying contributions and political contributions on taxes avoided. Second, the results of this study are particularly useful for future research following the U.S. Citizens United ruling that affects corporate lobbying and political contributions. Third, differing from previous research, I build a simultaneous equation model to jointly determine the link among lobbying contributions, political contributions, and taxes avoided addressing the endogeneity issues of those relationships. These insights can help firms, policy makers, and public affairs researchers understand the connection between contributions and tax avoidance.     

Targeting the lobbying effort: The importance of local government lobbying

Abstract Local government is subject to extensive lobbying, which is reasonable given the greater importance of the local public sector in large welfare states. Most of the scholarly attention has been focused on lobbying at the national level, often addressing the impact of interest groups on public policies. This article discusses a decision–making model where interest groups optimize their lobbying efforts given the way that different local governments and individual politicians respond to these activities. A number of propositions are tested on the basis of data from Norwegian local government. Contrary to prior theorizing, we do not find that representatives seeking re–election are contacted more frequently by interest groups. Interest groups target their lobbying activities toward politicians who are members of the relevant council committees, and they exert stronger pressure on members of the executive board and active representatives who perceive themselves as influential. Inter–municipal differences are also of importance: The lobbying activities are more intensive where electoral participation is low and in the larger urban municipalities, while the size of legislatures and the strength of the local political leadership affect lobbying efforts negatively. Interest groups tend to be more active in the richer local governments. The demands of the residential population impact weakly on lobbying efforts.     

Targeting the lobbying effort: The importance of local government lobbying

Local government is subject to extensive lobbying, which is reasonable given the greater importance of the local public sector in large welfare states. Most of the scholarly attention has been focused on lobbying at the national level, often addressing the impact of interest groups on public policies. This article discusses a decision–making model where interest groups optimize their lobbying efforts given the way that different local governments and individual politicians respond to these activities. A number of propositions are tested on the basis of data from Norwegian local government. Contrary to prior theorizing, we do not find that representatives seeking re–election are contacted more frequently by interest groups. Interest groups target their lobbying activities toward politicians who are members of the relevant council committees, and they exert stronger pressure on members of the executive board and active representatives who perceive themselves as influential. Inter–municipal differences are also of importance: The lobbying activities are more intensive where electoral participation is low and in the larger urban municipalities, while the size of legislatures and the strength of the local political leadership affect lobbying efforts negatively. Interest groups tend to be more active in the richer local governments. The demands of the residential population impact weakly on lobbying efforts.     

Firm‐level political capabilities and subsequent financial performance

While there is a robust literature on corporate political activity, scholars have not adequately framed these activities as being part of a strategy to garner political capabilities. In this paper, we incorporate political capabilities and argue that those firms that more intensely commit resources to political activities have associated subsequent performance benefits. In a sample of 87 Fortune 500 firms from 2005 to 2011, we find that both political action committee and lobbying intensity were associated with higher return on invested capital and return on assets after controlling for other factors. Additionally, we find support that the cumulative effect of political action committee and lobbying intensity on performance is also significant. Finally, we moderate the main effects with industry concentration and find that returns are greater in more consolidated industries. Copyright © 2015 John Wiley & Sons, Ltd.     

The dynamics of interest group evaluations of Congress

We apply a dynamic spatial model to interest group ratings of the members of Congress over the period 1959–1981. Spatial distances between an interest group and the members of Congress are assumed to be monotonic with the ratings. Our pooled cross-sectional time-series data set consists of 203,387 ratings by 59 interest groups. We restrict the spatial coordinates of the interest groups and members of Congress to be polynomial functions of time. Two significant dimensions are recovered: the first dimension, which accounts for approximately 75% of the variance, represents liberal-conservative positions on economic issues; the second dimension, which accounts for approximately an additional 5% of the variance, represents liberal-conservative positions on social issues. Nearly all the interest groups and most members of Congress are ideologically consistent. They are either liberal on both dimensions or conservative on both.     

Unintended Consequences of Local Sales Tax: Capitalization of Sales Taxes into Housing Prices

Local governments are under pressure to look for alternatives to property taxes as their main revenue source. One response has been to adopt local sales taxes. Prior studies offer little guidance on whether and how much local governments enhance their revenue capacity with local sales taxes. This article unveils the underlying mechanisms by exploring the capitalization of sales taxes into housing prices as a property tax base measure. The empirical analysis reveals a capitalization of local sales taxes into housing prices, indicating the reduction of property tax bases in higher sales tax areas from the long-term perspective. The findings suggest that a sales tax rate increase might not raise local revenue capacity as much as policymakers intend.     

State Sales Tax Policy in a Changing Economy: Balancing Political and Economic Logic Against Revenue Needs

Soon after implementation in the 1930s, the general sales taxes emerged as the largest state tax source. In 1990, income taxes produced nearly as much state revenue as did sales taxes. Although income tax revenue have increased significantly, the sales tax is not in jeopardy of being replaced in the immediate future. The sales tax still remains a vital state fiscal concern, particularly to those states without a broad individual income tax.     

The Political Origins of the Financial Crisis: The Domestic and International Politics of Fannie Mae and Freddie Mac

For much of the last decade it was clear that the commercial operations of the government-sponsored enterprises Fannie Mae and Freddie Mac were creating an increasing systemic financial risk. That risk was compounded by the fact that the Japanese and Chinese central banks were acting as cheap creditors. The Bush administration and some Republicans in Congress made efforts from 2001 to create a tougher regulatory framework for Fannie and Freddie. Fannie and Freddie were able to defeat these attempts to constrain their operations by a four-fold political strategy involving campaign contributions to members of Congress, a vast lobbying apparatus, the cultivation of a political language around affordable housing for minorities, and abusing and smearing their regulator. Since Japan and China understood that the US government would have to assume Fannie and Freddie's liabilities in a crisis they had no incentive to expose the political fiction that it would not.     

Cue‐Taking in Congress: Interest Group Signals from Dear Colleague Letters

Why do some pieces of legislation move forward while others languish? We address this fundamental question by examining the role of interest groups in Congress, specifically the effect of their legislative endorsements in Dear Colleague letters. These letters provide insights into the information that members use to both influence and make policy decisions. We demonstrate that endorsements from particularly well‐connected interest groups are a strong cue for members with limited information early in the legislative process and help grow the list of bill cosponsors. As bills progress, such groups have less direct weight, while legislation supported by a larger number of organizations and a larger number of cosponsors is more likely to pass. Thus, we illuminate the usage of Dear Colleague letters in Congress, demonstrate how members use interest groups in the legislative process, and shed new light on the varying impact of groups on public policy.     

Lifetime distributional effects of Social Security retirement benefits

This article presents three measures of the distribution of actual and projected net benefits (benefits minus payroll taxes) from Social Security's Old-Age and Survivors Insurance (OASI) for people born between 1931 and 1960. The results are based on simulations with the Social Security Administration's Model of Income in the Near Term (MINT), which projects retirement income through 2020. The base sample for MINT is the U.S. Census Bureau's Survey of Income and Program Participation panels for 1990 to 1993, matched with Social Security administrative records. The study population is grouped into 5-year birth cohorts and then ranked by economic status in three ways. First, the population is divided into five groups on the basis of individual lifetime covered earnings, and their lifetime present values of OASI benefits received and payroll taxes paid are calculated. By this measure, OASI provides much higher benefits to the lowest quintile of earners than to other groups, but it becomes less redistributive toward lower earners in more recent birth cohorts. Second, people are ranked by shared lifetime covered earnings, and the values of shared benefits received and payroll taxes paid are computed. Individuals are assumed to split covered earnings, benefits, and payroll taxes with their spouses in the years they are married. By the shared covered earnings measure, OASI is still much more favorable to persons in the lower income quintiles, although to a lesser degree than when people are ranked by individual covered earnings. OASI becomes more progressive among recent cohorts, even as net lifetime benefits decline for the entire population. Finally, individuals are ranked on the basis of their shared permanent income from age 62, when they become eligible for early retirement benefits, until death. Their annual Social Security benefits are compared with the benefits they would have received if they had saved their payroll taxes in individual accounts and used the proceeds to buy either of two annuities that provide level payments from age 62 until death: a unisex annuity that is based on the average life expectancy of the birth cohort or an age-adjusted annuity that is based on the worker's own life expectancy. On the permanent income measure, OASI is generally more favorable to people in higher income quintiles. Moreover, it is particularly unfavorable to those in the lowest quintile. Because people in the lowest quintile have a shorter life expectancy, they receive OASI benefits for a shorter period. This group would receive greater benefits in retirement if they invested their payroll taxes in the age-adjusted annuity. OASI is more favorable to them than the unisex annuity, however, OASI is becoming more progressive in that the net benefits it provides drop more rapidly among higher income quintiles than lower ones. This article also examines how OASI affects individuals by educational attainment, race, and sex. On both the lifetime covered earnings and the permanent income measures, OASI is more favorable to workers with less education and more favorable to women. The results by race and ethnicity are mixed. When people are ranked by the present value of their shared lifetime covered earnings, OASI appears more favorable to non-Hispanic blacks and Hispanics than to non-Hispanic whites. When people are ranked by shared permanent income in retirement, however, OASI produces negative returns for both non-Hispanic blacks and non-Hispanic whites in the most recent birth cohorts, with non-Hispanic blacks faring relatively worse. The changes across cohorts occur partly because of changes in tax rates and benefits, but more importantly because of changing demographics and earnings patterns of the workforce. Of particular importance is the increasing share of beneficiaries who receive worker benefits instead of auxiliary benefits as wives or widows. OASI benefits are based on the lifetime covered earnings of current or former married couples, as well as on earned retirement benefits of individuals. The reduced importance of auxiliary benefits (due to the higher lifetime covered earnings of women) and the increased proportion of divorced retirees make OASI more progressive--even as net benefits decline--for current and future cohorts than for cohorts who retired in the 1990s. Analysis of these findings suggests that simulations of policy changes in Social Security must take into account the decreasing importance of auxiliary benefits across birth cohorts and the complex changes in individuals' marital histories.     

The state of public affairs in Austria

Following almost five decades of federal coalition government between Social Democrats and People's Party alongside an interest mediation system that gave exclusivity to only a few institutions, from 2000 to 2006, Austria underwent a rapid transformation in the direction of a pluralistic free-market interest mediation system. However, this short but intense interlude, which led to the development and establishment of professional public affairs in Austria, was stopped short by the return of the traditional Austrian interest mediation system. Following a series of so-called lobbying scandals, in 2013, Austria introduced a mandatory lobbying and interest representation register at the federal level. Two years earlier, the industry formed its own trade association, the Austrian Public Affairs Association. A study commissioned by this association has for the first time shed light on the young public affairs industry, its actors, and the working environment. Copyright © 2014 John Wiley & Sons, Ltd.     

PACs,lobbies and political conflict: The case of gun control

Previous research has shown that PAC contributions from the National Rifle Association as well as letters and lobbying by Handgun Control, Inc. significantly affected Congressional voting on the Firearms Owners Protection Act of 1986, holding constant ideology, party, constituency characteristics, and a proxy for prior position on the issue. Using data from that study, this paper shows that contributions have a somewhat different effect than lobbying. Contributions from NRA were primarily targeted at NRA supporters and had the net effect of making the progunners even more so. Contributions from Handgun Control, while they did not significantly reinforce the proclivities of the gun controllers, were directed only at that group. At least in this case, money appears to exacerbate conflict. By contrast, the police lobby directed its attention at both gun controllers and pro-gunners; the lobby effectively induced pro-gunners to moderate their position. These findings are consistent with the hypothesis that PACs associated with membership groups, which seek to retain members whose primary reason for joining is self-expression, are likely to allocate monies in such a way as to exacerbate policy conflict and to allocate lobbying activities so as to induce moderation. Nonetheless, because the gun issue is unidimensional, the finding that money fosters conflict implies only that Congress will be noisy, but not in disequilibrium.     

SUPERFUND FINANCING ALTERNATIVES

In 1980 Congress created the Superfund to pay for the selective cleanup of hazardous waste disposal sites. The original Superfund program was financed by earmarked "feedstock" taxes on petroleum and 42 chemicals, and by a "waste-end" tax on hazardous waste received a t disposal facilities. Budgetary authority for the program expired in September 1985. Over a year elapsed before Congress renewed budgetary authority for the program by expanding the feedstock taxes, suspending the waste-end tax, and imposing a new broad-base tax on corporate income. This paper examines the efficiency and equity effects of the current and several alternative Superfund tax policies. Special emphasis is given to the administrative and compliance costs associated with each tax, and the capacity of each to complement EPA regulation of hazardous waste externalities.     

Lobbying and the 2006 U.S. midterm elections

• Lobbyists are inextricably intertwined with the electoral process in the United States, but rarely have they ever featured so prominently in an election year as in 2006. The midterm elections came at the end of a year in which the political news was often dominated by stories of lobbying scandal, most notably that involving Jack Abramoff. Lobbying was an important issue in many peoples' voting decisions, and moreover one of the immediate outcomes of the election was a raft of lobbying reform measures both in Congress and in the individual states. As one commentator put it: ‘For lobbyists, 2006 rolled by like a late‐night B movie where the earthquake wipes out the villagers who refused to heed the warning signs’ (Divis, 2006 ). This article reviews some of the most substantial lobbying scandals which emerged during 2006, considers how lobbying and lobbyists fared during the election campaigns, and analyses the various reforms which have recently been considered and implemented, before briefly examining how lobbyists will impact upon the 2008 election races.

Copyright © 2007 John Wiley & Sons, Ltd.     

Sales and Use Tax Simplification and Voluntary Compliance

Because of difficulties collecting sales taxes on Internet sales, several states have engaged in an effort (the Streamlined Sales Tax Project, SSTP) to simplify their sales tax systems. One hope among SSTP proponents is that a simplified system will result in Internet vendors voluntarily collecting the sales tax. We address two issues:

• ? Will states adopt the extensive reforms proposed by the SSTP?
• ? Will vendors voluntarily collect the sales tax?

We argue that states are unlikely to adopt extensive reforms, but if they did, many vendors would voluntarily collect sales taxes.     

Worldwide experience in sales taxation: Lessons for North America

Worldwide fiscal experience over the past twenty-five years indicates steady expansion in the political and academic constituency for expenditure taxation, including indirect taxes on consumption. Retail levies have emerged as the preferred method of indirect taxation of consumption, as older, pre-retail sales taxes have proven unsuited to modern economic structures. Increasingly, reform of sales taxation has involved a shift to one particular form of tax, the European Community type of value-added tax (VAT). This consumption tax option is again a topic of policy debate in North America, particularly in Canada where a VAT was under active consideration in 1985.This paper sifts through worldwide experience with broad-based sales taxes to identify lessons for tax policy in North America both in the short and longer-run. It indicates that the reputation of such taxes as regressive instruments may have been much exaggerated, and that in any case methods are available, particularly in Canada, for resolving equity issues in sales taxation. The VAT is shown to have marginal economic and administrative advantages over single-stage federal retail taxes in both Canada and the US. However, these advantages are not nearly so significant as in European countries where the VAT was adopted there. Further, sensible debate over the merits and limitations of the VAT in North America will call for much closer scrutiny of the problems unique to this form of tax. Finally, three political issues that were not significant in Europe will likely have an important bearing on any future choices of sales tax instruments, both in the U.S. and in Canada.     

The instrumental power of transnational private governance: Interest representation and lobbying by private rule‐makers

While scholars have researched transnational private governance for over two decades, we still know little about some of the specific political activities in which private rulemaking schemes engage. This article addresses this topic by bringing together hitherto separate literatures on private governance and interest groups. I argue that examining private governance's instrumental power, and interest representation and lobbying specifically, complements the literature's dominant focus on the structural and discursive power of private governance. The article makes three contributions. First, it conceptualizes private governance schemes as interest organizations by analyzing similarities and differences with traditional interest groups. Second, the article examines instrumental power empirically by assessing the participation of 48 transnational private governance schemes in the European Union's lobby register and variation among private governance schemes in this respect. Finally, the article contributes to developing a new research agenda to continue bridging the gap between the private governance and interest group literatures.     

Comparing Competing Theories on the Causes of Mandate Perceptions

The discussion of presidential mandates is as certain as a presidential election itself. Journalists inevitably discuss whether the president-elect has a popular mandate. Because they see elections as too complex to allow the public to send a unitary signal, political scientists are more skeptical of mandates. Mandates, however, have received new attention by scholars asking whether perceptions of mandate arise and lead representatives to act as if voters sent a policy directive. Two explanations have emerged to account for why elected officials might react to such perceptions. One focuses on the president's strategic decision to declare a mandate, the second on how members of Congress read signals of changing preferences in the electorate from their own election results. We test these competing views to see which more accurately explains how members of Congress act in support of a perceived mandate. The results indicate that members respond more to messages about changing preferences than to the president's mandate declaration .