Legitimacy through targeted transparency? Regulatory effectiveness and sustainability of lobbying regulation in the European Union

Regulating interest groups’ access to decision makers constitutes a key dimension of legitimate and accountable systems of government. The European Union explicitly links lobbying regulation with the democratic credentials of its supranational system of governance and proposes transparency as a solution to increase legitimacy and regulate private actors’ participation in policy making. This lobbying regulation regime consists of a Transparency Register that conditions access to decision makers upon joining it and complying with its information disclosure requirements. The extent to which transparency‐based regulatory regimes are successful in ensuring effective regulation of targeted actors and in being recognised as a legitimate instrument of governance constitutes a key empirical question. Therefore, the study asks: Do stakeholders perceive the transparency‐based EU lobbying regulation regime to be a legitimate form of regulatory governance? The study answers by building on a classic model of targeted transparency and proposes perceived regulatory effectiveness and sustainability as two key dimensions on which to evaluate the legitimacy of the Register. The arguments are tested on a new dataset reporting the evaluations of 1,374 stakeholders on the design and performance of the EU lobbying regulation regime. The findings describe a transparency regime that scores low in perceived effectiveness and moderate to low in sustainability. Citizens criticise the quality of information disclosed and the Register's performance as a transparency instrument. The Register did not effectively bridge the information gap between the public and interest groups about supranational lobbying. In terms of sustainability, interest organisations appreciate the systemic benefits of transparency, but identify few organisation‐level benefits. Organisations that are policy insiders incur more transparency costs so they instrumentally support transparency only insofar it suits their lobbying strategies and does not threaten their position. Insiders support including additional categories of organisations in the Register's regulatory remit but not more types of interactions with policy makers. They support an imperfect regulatory status quo to which they have adapted but lack incentives to support increased transparency and information disclosure. Targeted transparency proves an ineffective approach to regulating interest groups’ participation in EU policy making, constituting a suboptimal choice for ensuring transparent, accountable and legitimate supranational lobbying.     

Regulating lobbying activities in the European Union: A voluntary club perspective

This article offers a systematic exploration of why interest groups sign up to the European Union Transparency Register, a non‐binding lobby regulation system. We distinguish between instrumental and normative perspectives to explain voluntary compliance, and find that concern for one's reputation represents the most important motivational driver. Based on this, we suggest that the Transparency Register can be understood as a “voluntary club” sponsored by European institutions. This theoretical perspective captures the appeal of the instrument among lobbyists, but also a number of inconsistencies in its current design, which make it unviable in the long term. We outline implications for the ongoing reform of the Transparency Register, and more generally for the regulation of lobbying activities. The analysis draws on semi‐structured interviews with various types of lobbyists active in Brussels, and on data from public consultations organized by the European Commission.     

The acceptance,relevance and dominance of lobbying the EU Commission — a first‐time survey of the EU Commission's civil servants

Among public affairs techniques lobbying is by far the most mystifying one — at least in Europe. Lobbying comes from the Latin word ‘labium’ and means ‘entrance hall’ or ‘lounge’. Therein the essential meaning can be seen: today political decisions are not made in plenary assemblies but primarily in the pre‐political phase of balancing the various interests. Lobbying is to be understood as the ‘diverse intensive activities of social groups, chambers and companies in the political and bureaucratic vestibule’ (Beyme 1980). Modern lobbying on the EU level is an intermediary policy for the support of political decision making — even if some critics refuse to believe it. Lobbying at EU level has become a politically realistic dimension. Even if the mass media still take a very sceptical and negative view of lobbying in Brussels, based on the existing European taboo on influencing politics, an in‐depth analysis reveals various lobbies at work in EU institutions. Lobbying today is an essential part of all EU decision areas. This paper describes the functional theory approach of lobbying known as ‘cooperation as confrontation through communication’. For the first time, recipients of lobbying in the EU Commission are demonstrating their acceptance of lobbying efforts. The paper is based on the doctoral thesis ‘The acceptance, relevance and dominance of lobbying the EU Commission’ by Peter Koeppl, University of Vienna (unpublished). Copyright © 2001 Henry Stewart Publications     

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).     

Opaque transparency: an analysis of the Israeli lobbying regulatory regime of 2008

After some failed attempts to regulate the lobbying, the Israeli Parliament—the Knesset—passed the Lobbyist Law on April 2nd 2008. Although lobbying is a common and legitimate part of the democratic process, it raises issues of trust, equality of access, and transparency. What motivated the MKs to regulate lobbying—public interest, private interest, or symbolic politics? The MKs claimed that the law was needed for improving transparency whereas MK Yechimovich declared that it balances the strength of the rich, represented by lobbyists and the wide public. Assessing the achieved transparency in the comparative framework of other lobbying regulatory regimes, we see that the law confers tangible benefits on powerful interest groups, while providing only symbolic gestures to the public. Lack of information available for MKs creates a need for lobbyists for political intelligence and MKs need to identify the interests in play to guarantee for themselves the necessary legislative subsidy. Copyright © 2011 John Wiley & Sons, Ltd.     

Multilevel Governance and Business Interests in the European Union

The article analyzes how business interests responded to European integration. It draws on survey data of eight hundred German, French, British, and European Union (EU) trade associations as well as thirty-four large firms. The argument is that the multilevel governance approach to European integration captures the realities of EU interest intermediation better than neofunctionalism and intergovernmentalism. The article suggests that the strategies of interest organizations depend mainly on their location in the EU multilevel system and on their governance capacities. I distinguish two kinds of governance capacities: negotiation capacities and organizational resources. The analysis proceeds in the following steps: After outlining the three theories of European integration and presenting their implications for interest groups, a brief overview of the relative importance for interest organizations of EU and national institutions over time is provided. Then, cluster analysis techniques serve to identify types of interest groups according to their lobbying strategies in the multilevel system: niche organizations, occasional players, traditionalists, EU players, and multilevel players are distinguished. The composition of these clusters and the characteristics of their members support the multilevel governance approach and indicate that multilevel players have greater governance capacities than organizations in the other clusters.     

A Standard for Regulatory Compliance? Industry Self‐regulation,the Courts and AS3806‐1998

The primary objective of this article is to describe recent Australian moves to greater industry self-regulation and, within that context, to examine the development of AS3806, a voluntary standard developed by Standards Australia, which firms may use as a model or template for the design and management of their regulatory compliance systems. The article is divided into four sections. The first provides an outline of recent Australian developments regarding industry self-regulation and compliance. The second describes the growing interest in industry codes of conduct and the role of the Australian Competition and Consumer Commission (ACCC). The third describes the main features of AS 3806. The fourth examines the question of compliance standards in relation to the legal process, focusing on two recent cases and is followed by a conclusion.     

Social heterogeneity and wasteful lobbying

Using a general equilibrium model with endogenous policy, we explore how heterogeneity affects wasteful lobbying by sectoral interest groups. With the help of a simulation approach, we first investigate the impact of information heterogeneity on how lobbies react to a shift from a soft to a strict government budget constraint. Next, we examine how lobbying is influenced by heterogenous perception of the general equilibrium implications of lobbying effort. Finally, we explore the consequences of heterogenous specialization in households' asset portfolios. We conclude that social heterogeneity in information, perceptions, and portfolio compositions increases incentives to lobby.     

Diluted regulations—a need to review the theoretical classification of the different lobbying regulatory environments

Regulation has been claimed to be acquired by the industry, yet while the economic regulation was often established with the approval and encouragement of the regulated industry, social regulation has usually been thrust upon industry following demands by public interest groups. Why would the social regulation still fail to produce behaviour, or results in accordance with the public interest, if the public interest groups initiated it? The failure to define clearly the concept of ‘public interest’ and the absence of adequately clear regulatory objectives would not provide all the convincing answers. The wish of the politicians to respond to a mischief before public concern dies down, seems to point towards the symbolic politics claims. Although lobbying is integral to democratic politics, it challenges the policy making process as the risks and opportunities associated with policy change are large. Lobbying regulations, belonging to the social regulations fold, have been observed as symbolic in Israel and are diluted by tricky loopholes. Recent research has used data from Centre of Public Integrity (CPI) in order to theoretically classify different regulatory environments. The CPI measures only what the law says, but it does not measure the outcome—the application of the law. This paper points out that the possible interaction of symbolic politics with social regulation may lead to the reoccurring legislative void, resulting in the dilution effect of the lobbying regulations, and it highlights the need to review the theoretical classification, and thereby, also the actual strength of the different regulatory environments. Copyright © 2013 John Wiley & Sons, Ltd.     

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.     

Free-riding on rent seeking—an empirical analysis

The Common Agricultural Policy is modelled as a club good providing the European Union (EU) farmer with financial benefits. We build an economic model which explains how much farmers in individual EU countries invest in rent-seeking activities in order to test for free-riding behaviour on lobbying costs. For our investigation we group the EU member countries by farm structure, and the type of benefit received. We explain the fees paid by farmers for lobbying by other countries’ fees, political variables, and country and regional agricultural characteristics. The model shows that some member countries free ride on others suggesting a form of policy path dependency.     

Sleaze or clear blue water?: the evolution of corporate and pressure group representation at the major UK party conferences

There has been growing academic and public interest in corporate political lobbying in both the UK and EU in recent years. In Britain, links between politicians and commercial interests have been one of the areas examined by the Committee on Standards in Public Life (‘the Nolan Committee’ and now ‘the Neill Committee’). A visible but under‐researched aspect of political lobbying by firms and other groups is the range of activities that take place at annual party conferences. An exhaustive study of these activities at the three main British party conferences between 1994–97 is reported, covering the period from Tony Blair's first appearance as party leader to the aftermath of the 1997 General Election. There is clear growth of visible lobbying, particularly at the Labour conferences, over the period leading up to the election, and a dropping off in 1997; particularly at the Conservative conference. The implications of the results for organisations, and particularly for public affairs practitioners, are considered. Copyright © 2002 Henry Stewart Publications     

Civil Society in World Politics: How Accountable are Transnational CSOs?

Transnational civil society organizations (CSOs) are often said to lack accountability. Taking issue with this claim, we report the results of a study on the accountability regimes of 60 transnational CSOs engaging in political advocacy. We scrutinize their transparency, opportunities for internal participation, evaluations and self-regulation, complaint procedures, and their independence from the state and intergovernmental organizations. We find that most transnational CSOs are reasonably transparent and offer participatory opportunities at least for members. They are organizationally independent from states and intergovernmental organizations, but dependencies on public funding are striking in some cases. Independent evaluations of their activities are scarce and codes of conduct, often suggested as an avenue towards better self-regulation of CSOs, do not seem to play a major role in practice. We conclude that the debate over transnational CSO accountability should focus on the most critical issues. In the case of general interest organizations, this seems to be the danger of co-optation through public financing. Special interest organizations, by contrast, are highly independent but have deficits in external transparency, especially regarding their budget.     

Cooperative lobbying and endogenous trade policy

This paper considers trade policies in a small open economy in which two influential interest groups lobby the government. Since competitive lobbying leads to excessive rent-seeking expenditures, the lobbies have an incentive to cooperate. The outcome of cooperative lobbying is characterized in terms of lobbying and bargaining power of the two groups. Two important results are derived. First, if the power of competing interest groups is balanced, then cooperation leads to free trade. Second, if it is unbalanced, cooperation may, on the contrary, increase protection.     

Regulating Lobbyists: A Comparative Analysis of the United States, Canada, Germany and the European Union

Lobbying is central to the democratic process. Yet, only four political systems have lobbying regulations: the United States, Canada, Germany and the EU (most particularly, the European Parliament). Despite the many works offering individual country analysis of lobbying legislation, a twofold void exists in the literature. Firstly, no study has offered a comparative analysis classifying the laws in these four political systems, which would improve understanding of the different regulatory environments. Secondly, few studies have analysed the views of key agents—politicians, lobbyists and regulators—and how these compare and contrast across regulatory environments.
We firstly utilise an index measuring how strong the regulations are in each of the systems, and develop a classification scheme for the different 'ideal' types of regulatory environment. Secondly, we measure the opinions of political actors, interest groups and regulators in all four systems (through questionnaires and elite interviews) and see what correlations, if any, exist between the different ideal types of system and their opinions. The conclusion highlights our findings, and the lessons that can be used by policy-makers in systems without lobbying legislation.     

Central and Eastern European business interest associations and EU policy making

The interactions between Central and Eastern European (CEE) business interest associations (BIAs) and their EU trade associations have not yet attracted much attention in academic research. This paper has two main objectives. The first is to assess quantitatively the participation level of CEE BIAs in EU trade associations. The second is to assess qualitatively the nature of the relationships between them by surveying Bulgarian BIAs as a case study. This article stresses the fact that EU enlargement has decreased the representativeness of EU trade associations due to the weak level of membership of CEE BIAs. It also highlights the importance of membership in EU trade associations in terms of both Europeanization and socialization, even though CEE national BIAs, such as Bulgarian ones, are still very much anchored in their domestic interactions and lobbying.     

It's coming from inside the House (of Commons): Agenda control,accountability, and interest group lobbying in majoritarian parliaments

In majoritarian parliaments, the executive branch typically enjoys an informational advantage over the legislature. In theory, legislators can reduce this asymmetry with information from interest groups. In practice, the government is almost always better informed than the legislature. This article develops a model whereby a politician's access to outside information depends not just on her parliamentary power but on the diffusion of legislative agenda control among political parties—for example, during minority government. Using a new panel data set of 41,619 lobbying communications, it finds interest groups are more likely to communicate with government frontbenchers than with opposition or backbench members. This gap diminishes as agenda control diffuses to opposition parties. It also finds evidence of partisan clustering in lobbying networks during majority government. Strong legislative parties weaken accountability by restricting access to outside information, but this is conditional on the governing party's control over the agenda.     

The lobbyist with ‘balls of iron and a spine of steel’: why Ireland needs lobbying reform

• In common with most other nations, Ireland currently has no statutory regulation of lobbying activities. Equally, and also in common with many countries, lobbying regulation is becoming a more prominent subject of political debate. This paper considers the pervasive context of political corruption and scandal highlighted by one lobbyist now in jail, analyses various suggestions for lobbying regulation which have been proposed, and concludes with a potential reform agenda. The opportunity exists for Ireland to take a lead in producing a comprehensive and meaningful regulatory regime—genuine and principled reform, rather than a muddled compromise.

Copyright © 2009 John Wiley & Sons, Ltd.     

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.