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Influence by Intimidation: Business Lobbying in the Regulatory Process

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  • Alex Acs
  • Cary Coglianese

Abstract

Interest group influence in the policy process is often theorized to occur through a mechanism of exchange, persuasion, or subsidy. Here, we explore how business groups may also exert influence by intimidating policymakers—a form of persuasion, but one based on the provision not of policy information but of political information. We develop a theory in which a business firm lobbies a regulator to communicate political information about its capacity to commit to future influence-seeking activities that would sanction the regulator. The regulator assesses the credibility of this message by evaluating the firm’s commitment to lobbying. Guided by our theory, we present empirical evidence consistent with expectations that intimidation can shape regulatory outcomes to the advantage of certain firms, both through a chilling effect, by which lobbying derails nascent regulatory plans, as well as a retreating effect, by which opposition to published proposals leads to their withdrawal.

Suggested Citation

  • Alex Acs & Cary Coglianese, 2023. "Influence by Intimidation: Business Lobbying in the Regulatory Process," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 39(3), pages 747-774.
  • Handle: RePEc:oup:jleorg:v:39:y:2023:i:3:p:747-774.
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    File URL: http://hdl.handle.net/10.1093/jleo/ewac005
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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