Lobbying and asymmetric information

Informational lobbying — the use by interest groups of their (alleged) expertise or private information on matters of importance for policymakers in an attempt to persuade them to implement particular policies — is often regarded as an important means of influence. This paper analyzes this phenomenon in a game setting. On the one hand, the interest group is assumed to have private information which is relevant to the policymaker, whilst, on the other hand, the policymaker is assumed to be fully aware of the strategic incentives of the interest group to (mis)report or conceal its private information. It is shown that in a setting of partially conflicting interests a rationale for informational lobbying can only exist if messages bear a cost to the interest group and if the group's preferences carry information in the ‘right direction’. Furthermore, it is shown that it is not the content of the message as such, but rather the characteristics of the interest group that induces potential changes in the policymaker's behavior. In addition, the model reveals some interesting results on the relation between, on the one hand, the occurrence and impact of lobbying and, on the other hand, the cost of lobbying, the stake which an interest group has in persuading the policymaker, the similarity between the policymaker's and the group's preferences, and the initial beliefs of the policymaker. Moreover, we relate the results to some empirical findings on lobbying. qu]Much of the pressure placed upon government and its agencies takes the form of freely provided “objective” studies showing the important outcomes to be expected from the enactment of particular policies (Bartlett, 1973: 133, his quotation marks). qu]The analysis here is vague. What is needed is an equilibrium model in which lobbying activities have influence. Incomplete information ought to be the key to building such a model that would explain why lobbying occurs (information, collusion with decision makers, and so on) and whether lobbying expenses are socially wasteful. (Tirole, 1989: Ch. 1.3, p. 77, Rentseeking behavior).     

Show Them Your Teeth First!

This paper investigates the choice of an interestgroup between lobbying (``words'') and pressure(``actions'') in order to influence a policymaker. Both lobbying and pressure are modeled asstrategic means of transmitting information that isrelevant to the policymaker. However, only pressure isdirectly costly to the policymaker. The interactionbetween the interest group and the policymaker isframed as a repeated signaling game. In equilibriumpressure – in contrast to lobbying – only occurswhen the interest group's reputation is sufficientlylow, and always improves its reputation. It is shownthat (repeated) lobbying cannot completely substitutefor pressure, and that the interest group may beforced to sustain its reputation through lobbying. Weconclude that pressure is typically used to build upa reputation, lobbying to maintain a reputation.     

Looking for leverage in PAC markets: Corporate and labor contributions considered

In this paper we explore the popular perception that political action committees (PACs) have substantial influence over elected legislators. We question whether the leverage in the PAC market is on the side of the contribution-maker or the contribution-taker. Analysis of the structure of PAC markets suggests most markets are sellers' markets, not buyers' markets. PAC contributions then may be more like protection money than attempts to buy votes or access. The leverage of the politician (seller) may be tempered if a substantial number of large PACs have homogeneous interests, and the ability to concentrate their contributions to the same legislators. This contention is supported by analysis of differences in labor and corporate PAC giving in the 1980 and 1984 general elections. Labor PACs, which are much larger than corporate PACs, have more homogeneous interests, give virtually all of their money to one party, and appear to have more discretion in making contribution decisions than do corporate PACs. An implication of this analysis for corporate executives is that using political action committees at the federal level may not be a strategy where corporations have a comparative advantage. — Senator Robert Dole (R-Kan.) — Senator Thomas Eaglecton (D-Mo.)     

Interest groups,campaign contributions,and probabilistic voting

This essay develops a simple model to analyze the impact of campaign contributions on electoral-policy decisions of candidates for office. Interest groups here are firms that select contributions under the assumption that candidates' policies and opposing groups' donations remain unaltered. Candidates, however, recognize that their policy choices affect contributions. Campaign contributions are used by candidates to affect policy-oriented voters' perceptions of candidates' positions. In this framework the introduction of campaign contributions may affect candidates' electoral policies, and if they do then they benefit surely exactly one of the two interest groups.     

Self-imposition of public oversight

We argue that policymakers may have personal interests in policy restraints channeled through public oversight. Self-imposition of public oversight can be beneficial for the policymaker because it may help alleviate the dynamic inconsistency problem that she otherwise faces. In the setting studied herein, self-imposed public oversight takes the form of a ceiling on tax rates, which can be overridden only with the legislature’s consent. Such a mechanism is shown to credibly commit the policymaker to future tax restraint, thus inducing larger productive effort.     

Corporate lobbying in Europe,managing knowledge and information strategies

• Given that knowledge and information are critical resources for acquiring access to the EU policy process, the question of this paper is how firms should manage the knowledge and information strategies surrounding their lobbying attempts. Developing an appropriate resource base is critical for firms trying to bring their interests to bear on European decision‐making. The same holds for the ability to recognize potential points of entry to the EU policy process. Next to substantial knowledge and expertise, therefore, the ability to understand policy dynamics and the appropriate timing of lobbying attempts are critically important in corporate lobbying in Europe. The implication of this argument is that managing knowledge and information strategies become increasingly important for handlings firms' public affairs.

Copyright © 2006 John Wiley & Sons, Ltd.     

THE DESIGN AND USE OF PERFORMANCE INFORMATION IN INDONESIAN LOCAL GOVERNMENTS UNDER DIVERGING STAKEHOLDER PRESSURES

Public sector managers in less developed countries are confronted with opposing forces. A lack of sufficient resources along with a tradition of corruption are obstacles for developing and using performance measurement systems. However, recent public sector reforms in less developed countries, including decentralisation and anti‐corruption programmes, stimulate the development and use of such systems. On the basis of a framework, which distinguishes different types of stakeholders, each with particular performance interests, we analyse how public sector managers are coping with the two opposing forces, given the relative power positions and the interests of their stakeholders. On the basis of four cases studies of local government agencies in Bali (Indonesia), we found that with respect to the annual performance reports, managers in these agencies focus more on fulfilling the formal requirements regarding the format of these reports and on their timely submission than on their contents, which are all symptoms of a symbolic rather than functional use of performance information. However, the reports include information on inputs that is linked to similar information in short‐term reports, which the managers use in a functional manner. These managers show a kind of juggling behaviour, in the sense that they partially try to serve conflicting performance interests. Copyright © 2012 John Wiley & Sons, Ltd.     

Male MPs,electoral vulnerability and the substantive representation of women's interests

What are the political conditions affecting male MPs’ willingness to represent women's interests in parliament? This paper explores the role of electoral vulnerability in this regard and analyzes whether male MPs’ re-election prospects affect their likelihood of paying attention to women's concerns. Theoretically, we expect that male MPs are not blamed if they do not represent women's interests but can gain additional credit for doing so. Thus, male MPs should be more likely to speak on behalf of women if their electoral vulnerability is high and if they need to win additional votes to be re-elected. Empirically, the paper analyzes the representation of women's issues in the British House of Commons, by using Early Day Motions tabled preceding the General Elections in 2001, 2005, 2010 and 2015. The results show that male MPs are more likely to represent women's interests when their re-election is at risk.     

The economics of the women's movement

In recent years, the political process has seemed to become increasingly favorable to issues involving women, as shown by the relatively large number of states which have passed the Equal Rights Amendment. The economic theory of politics would imply that this result would occur if the interests of women in removing labor force sex discrimination had increased. We argue that most sex descrimination in hiring and pay of women is in the form of statistical discrimination where sex is used as a proxy for labor force attachment. If this is so, then, on net, sex discrimination in employment practices would pay in the sense that the gainers from such behavior would gain more than the losers would lose. Married women would share in such gains since they would be compensated for their lower earnings by the higher earnings of their husbands. Single women, however, would receive no such compensation. We therefore hypothesize that the recent increase in legislation benefitting women is related to marriage rates, not to female labor force participation. Using votes in the state legislatures on the ERA as a measure of success by state of the women's movement, we find that our results do hold — number of single women is significant in explaining such voting but female labor force participation is not significant.     

If planning is everything,maybe it's nothing

Where planning does not measure up to expectations, which is almost everywhere, planners are handy targets. They have been too ambitious or they have not been ambitious enough. They have perverted their calling by entering into politics or they have been insensitive to the political dimensions of their task. They ignore national cultural mores at their peril or they capitulate to blind forces of irrationality. They pay too much attention to the relationship between one sector of the economy and another while ignoring analysis of individual projects, or they spend so much time on specific matters that they are unable to deal with movements of the economy as a whole. Planners can no longer define a role for themselves. From old American cities to British new towns, from the richest countries to the poorest, planners have difficulty in explaining who they are and what they should be expected to do. If they are supposed to doctor sick societies, the patient never seems to get well. Why can't the planners ever seem to do the right thing?     

How Do Interest Groups Seek Access to Committees?

Concerns that interest groups use their financial resources to distort the democratic process are long‐standing. Surprisingly, though, firms spend little money on political campaigns, and roughly 95% of publicly traded firms in the United States have never contributed to a political campaign. Do interest groups seek political access through their modest contributions, or are these contributions only a minor and forgettable part of the political process? In this article, we present comprehensive evidence that interest groups are extremely sophisticated in the way they make campaign contributions. We collect a new data set on U.S. state legislative committee assignments and legislator procedural powers from 1988 to 2014, merged with campaign finance data, in order to analyze over 440,000 candidate–committee observations across 99 legislatures. Using a series of difference‐in‐differences designs based on changes in individual legislators' positions in the legislature, we not only show that interest groups seek out committee members, but we also show that they value what we call indirect access. When a legislator gains procedural powers, interest groups reallocate considerable amounts of money to her. The results reveal how interest groups in a wide range of democratic settings seek to influence the policy process not only by seeking direct access to policy makers but by seeking indirect access to legislative procedure as well.     

Politics, Altruism, and the Definition of Poverty

The history of poverty lines suggests that they are determined jointly with poverty policy in the same political game. If the definition of poverty is endogenous, however, why do altruistic voters allow poverty to persist indefinitely, as seems to be the case in real life? A simple redistribution model shows that the persistence of poverty imposes fairly strong restrictions on the nature of voter altruism. Specifically, a voter's compassion for the poor must rise as the defined severity of the poverty problem worsens. Given such preferences, political actors face incentives to define poverty as a severe problem and then to use redistribution to reduce it significantly. There is no direct incentive to eliminate poverty, however; indeed, voters may prefer a state in which policy always attacks poverty vigorously and yet never defeats it. It follows that social policy should not be judged by its success in eliminating poverty, which may be directly counter to voter interests and therefore practically impossible. Rather, we should ask whether poverty policy provides enough help to people whom voters currently consider to be poor.     

Block grants for the needy: the case of AFDC.

Changes in the federal program of Aid to Families with Dependent Children have been considered which would alter the program from one in which federal dollars match state and local contributions, to a program in which the federal contributions are fixed in the form of a block grant. A review of econometric evidence suggests that under a block grant scheme, the federal contribution must be substantially greater than under a matching grant if the program's beneficiaries are to receive the same level of benefits. If the federal government seeks to maintain benefits unchanged in real terms, the states' share of total welfare expenditures will decline.     

Defending the organisation,not the members: Unions and the reform of job security legislation in Western Europe

European labour markets are often described as rigid with comparatively high levels of job protection that do not allow for the flexible adjustment of employment to economic fluctuations. This interpretation overlooks important sources of flexibility, however. Research has shown that recent labour market policy reforms have allowed for the creation of two‐tier labour markets consisting of insiders in standard employment relationships and outsiders in non‐standard employment. This outcome has typically been explained by pointing to the representational interests of unions or social‐democratic parties. It has been argued that rather than protecting all labour market participants, unions and social‐democratic parties focus on the interests of their members and their core constituency, respectively, most of whom are in standard employment relationships. In contrast, it is argued here that unions' institutional power resources are the crucial variable explaining this outcome. In difficult economic times, when unions are asked to make concessions, they will assent to labour market reforms, but only to those that do not fundamentally threaten to undermine their organisational interests. In the context of job security legislation, this means that unions defend the protection of permanent contracts while they compromise on the regulation of temporary employment. This ‘second best solution’ allows them to protect their organisational interests, both by retaining their institutional role in the administration of dismissals and by living up to their institutional role as one of the organisations responsible for the direction of labour market policy reform. Using fsQCA this article shows that unions' institutional power resources are more apt to explain the observed two‐tier reform pattern than the unions' or the social‐democratic parties' representational interests.     

Employers,the state and the politics of institutional change: Vocational education and training in Austria,Germany and Switzerland

An in‐depth comparison of Austria, Germany and Switzerland shows that the employers' constellation and the elites of the public education administration affect patterns of institutional change. If large firms are the dominant actors and collaborate with elites in the public education administration, institutional change follows a transformative pattern. If small and medium‐sized firms are in a strong position and have the power to influence public elites according to their interests, self‐preserving institutional change results. The article also shows that it is not so much trade unions as small and medium‐sized firms that act as a brake on transformative change. The article adds to the literature of institutional change by arguing that specifying and explaining patterns of institutional change requires that sufficient scope be allowed for actors' creative handling of institutions. It also suggests that in order to differentiate between self‐preserving and transformative change, one has to specify the important institutional dimensions that sustain an institution. The article combines Mill's method of agreement and difference.     

Campaign resources and electoral success: Evidence from the 2002 French parliamentary elections

We examine the factors that improve the candidates’ likelihood of winning an election by drawing on information from campaign resources used by candidates running in the 2002 French parliamentary election. The main effects that we wish to analyze are the candidates’ gender, political affiliation and possible incumbency. We find that the contributions the candidates received and their political affiliations determine their acceding to the second round of the elections. But surprisingly once they make it to the second round, the contributions cease to be relevant; only the candidates’ gender, incumbency and the actual spending rather than the contribution levels matter.     

Ideology,voting, and shirking

Since we first raised the issue in 1979, scholars have addressed two questions regarding ideology and congressional voting. Does ideology have an impact on such voting? Do representatives shirk by voting their own ideology rather than their constituents' interests? For the first question, it appears that there is a consensus that ideology does matter, although we present some confirming evidence for 1980. The second question has been confused; some think that ideology and shirking are identical, although they are logically separate categories. We show that even if ideological shirking exists, it is relatively unimportant. We also show that self interested (non-ideological) shirking exists. We conclude that research efforts to untangle constituents' and representatives' separate ideologies have been misguided and that further efforts to examine the determinants of constituent ideology should be pursued.     

Latin America's Fledgling,Fumbling Democracies

By a small majority, Latin Americans are disposed toward preferring democracy over other forms of government, and for now almost all leaders in the region hold office from elections not military coups. Still, most Latin Americans quite correctly do not believe democracy has generally served their interests, that is, produced the jobs, houses, food, justice, and opportunities more and more people tell pollsters they want for themselves and their families. Personal observations and many studies, by the United Nations, the Organization for Economic Cooperation and Development, and others, confirm Latin America's unequaled inequalities and in many respects virtual economic stagnation as far as most people are concerned. The problem is not mainly bad individual leaders or foreign predators, as is often charged, but incompetent governance generally and the inability or refusal of Latins themselves to match their desires with the protracted effort needed to achieve their aspirations. Institutions and paternalistic thinking that go back for centuries persist in adapted forms and today are not only not producing for the majority but dragging Latin America farther and farther behind more successfully reforming countries, particularly in Asia. Latins have it in their power to change things, if they will.     

Private regulation,public policy,and the perils of adverse ontological selection

What problems can private regulatory governance solve, and what role should public policy play? Despite access to the same empirical evidence, the current scholarship on private governance offers widely divergent answers to these questions. Through a critical review, this paper details five ontologically distinct academic logics – calculated strategic behavior; learning and experimentalist processes; political institutionalism; global value chain and convention theory; and neo-Gramscian accounts – that offer divergent conclusions based on the particular facets of private governance they illuminate, while ignoring those they obfuscate. In this crowded marketplace of ideas, scholars and practitioners are in danger of adverse ontological selection whereby certain approaches and insights are systematically ignored and certain problem conceptions are prioritized over others. As a corrective, we encourage scholars to make their assumptions explicit, and occasionally switch between logics, to better understand private governance's problem-solving potential and its interactions with public policy.     

Deliberative layering: Explaining diverse interest mobilization across the European Parliament's Policy Cycle

Drawing from work on deliberation and information‐access, this paper conceptually frames why and when different types of interests mobilize across the parliamentary policy cycle. We posit that each policy stage holds its own deliberative purpose and logic, leading to a variation in the type and volume of information demanded. The legitimacy of the expertise interest groups provide is affected by their organizational characteristics. To ensure the smooth flow of the policy process, members of parliament encourage groups that legitimately hold relevant information to mobilize at each policy stage, while lobbyists choose to mobilize when their expertise allows them to better influence policy‐makers' debates. We test our argument in the context of the European Parliament, following a unique survey of the 8th legislature (2014–2019). The responses lend support to our model. In a policy process that contains various stages of deliberation, different organizations hold an information‐expertise key that gives them access at different stages. Significantly, less studied groups, such as think tanks and consultancies, mobilize well ahead of others in the cycle's initial phases; while lobbyists representing public constituencies dominate in the final stages. The paper contributes to broader theoretical discussions on pluralism, bias, and deliberation in policy‐making.