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Who Uses Commercial Lobbying Firms

Author

Listed:
  • Brittany Feor
  • Blair Long
  • Eric Richert

Abstract

This paper explains the type of interest groups that use commercial lobbyists and the types of groups that lobby directly or are excluded from access to politicians. The main results provide evidence that commercial lobbying and donations by these firms to politicians can improve policy outcomes by increasing the number of groups that the politician can trust. Special interest groups come up with policy proposals that may be good or bad for society. They also get a benefit of having their idea implemented regardless of its overall social benefit so cannot be trusted to present their policy only when it is good for society. We show that repeated interaction with a policy maker can incentivize truthful communication. Therefore, interest groups working on highly salient issues or who work on issues with mostly high social benefits, can lobby alone, while interest groups who work on less salient issues or are less reputable need to use a commercial lobbyist to be trusted by the politician. Finally, firms of the lowest quality or salience are excluded from influencing the policy maker.

Suggested Citation

  • Brittany Feor & Blair Long & Eric Richert, 2018. "Who Uses Commercial Lobbying Firms," Working Paper 1409, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:1409
    as

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    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1409.pdf
    File Function: First version 2018
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    References listed on IDEAS

    as
    1. Groll, Thomas & Ellis, Christopher J., 2014. "A simple model of the commercial lobbying industry," European Economic Review, Elsevier, vol. 70(C), pages 299-316.
    2. Jonathan Levin, 2003. "Relational Incentive Contracts," American Economic Review, American Economic Association, vol. 93(3), pages 835-857, June.
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    4. Thomas Groll & Christopher J. Ellis, 2017. "Repeated Lobbying By Commercial Lobbyists And Special Interests," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1868-1897, October.
    5. Christopher Cotton, 2016. "Competing for Attention: Lobbying Time-Constrained Politicians," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(4), pages 642-665, August.
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    7. Cotton, Christopher, 2012. "Pay-to-play politics: Informational lobbying and contribution limits when money buys access," Journal of Public Economics, Elsevier, vol. 96(3), pages 369-386.
    8. Arnaud Dellis & Mandar Oak, 2016. "Overlobbying and Pareto-improving Agenda Constraint," School of Economics and Public Policy Working Papers 2016-05, University of Adelaide, School of Economics and Public Policy.
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    10. Marianne Bertrand & Matilde Bombardini & Francesco Trebbi, 2014. "Is It Whom You Know or What You Know? An Empirical Assessment of the Lobbying Process," American Economic Review, American Economic Association, vol. 104(12), pages 3885-3920, December.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Repeated Contracts; Commercial Lobbying; Political Access; Strategic Communication;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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