IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/68637.html
   My bibliography  Save this paper

Lobbying, Inside and Out: How Special Interest Groups Influence Policy Choices

Author

Listed:
  • Wolton, Stephane

Abstract

Scholars have long recognized two classes of special interest group (SIG) expenditures: inside lobbying, which is intended to influence the content of a bill; and outside lobbying, which is intended to influence the likelihood a bill is enacted into law. This paper juxtaposes both lobbying activities within a single model. Policy choices are a function of the decision-maker's assessment of SIGs' willingness to engage in outside lobbying. Importantly, inside lobbying expenditures do not always reflect SIGs' outside lobbying capacities and therefore cannot adequately measure SIG influence. Consequently, empirical studies of SIG influence which exclusively consider inside lobbying expenditures--as nearly all existing tests do--are likely to produce spurious results. The paper highlights that strong SIG influence is consistent with a small effect of inside lobbying expenditures on policy choice.

Suggested Citation

  • Wolton, Stephane, 2016. "Lobbying, Inside and Out: How Special Interest Groups Influence Policy Choices," MPRA Paper 68637, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:68637
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/68637/1/MPRA_paper_68637.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stephane Wolton, 2015. "Political conflicts, the role of opposition parties, and the limits on taxation," Journal of Theoretical Politics, , vol. 27(4), pages 570-587, October.
    2. Matthew Ellman & Leonard Wantchekon, 2000. "Electoral Competition Under the Threat of Political Unrest," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(2), pages 499-531.
    3. Stephen Ansolabehere & John M. de Figueiredo & James M. Snyder Jr, 2003. "Why is There so Little Money in U.S. Politics?," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 105-130, Winter.
    4. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    5. 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.
    6. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 179-221.
    7. Faruk Gul & Wolfgang Pesendorfer, 2012. "The War of Information," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 707-734.
      • Gul, Faruk & Pesendorfer, Wolfgang, 2010. "The War of Information," Papers 9-13-2010, Princeton University, Research Program in Political Economy.
    8. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(2), pages 265-286.
    9. Giovanni Maggi & Pinelopi Koujianou Goldberg, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December.
    10. Denzau, Arthur T. & Munger, Michael C., 1986. "Legislators and Interest Groups: How Unorganized Interests Get Represented," American Political Science Review, Cambridge University Press, vol. 80(1), pages 89-106, March.
    11. Richard Ball, 1995. "Interest Groups, Influence And Welfare," Economics and Politics, Wiley Blackwell, vol. 7(2), pages 119-146, July.
    12. Hall, Richard L. & Wayman, Frank W., 1990. "Buying Time: Moneyed Interests and the Mobilization of Bias in Congressional Committees," American Political Science Review, Cambridge University Press, vol. 84(3), pages 797-820, September.
    13. Zhihao Yu, 2005. "Environmental Protection: A Theory of Direct and Indirect Competition for Political Influence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 269-286.
    14. Austen-Smith, David, 1995. "Campaign Contributions and Access," American Political Science Review, Cambridge University Press, vol. 89(3), pages 566-581, September.
    15. Matthias Dahm & Nicolás Porteiro, 2008. "Informational lobbying under the shadow of political pressure," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(4), pages 531-559, May.
    16. Gordon, Sanford C. & Hafer, Catherine, 2005. "Flexing Muscle: Corporate Political Expenditures as Signals to the Bureaucracy," American Political Science Review, Cambridge University Press, vol. 99(2), pages 245-261, May.
    17. Bombardini, Matilde & Trebbi, Francesco, 2011. "Votes or money? Theory and evidence from the US Congress," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 587-611, August.
    18. Thomas Groll & Anja Prummer, 2016. "Whom to Lobby? Targeting in Political Networks," Working Papers 808, Queen Mary University of London, School of Economics and Finance.
    19. Timothy Besley & Stephen Coate, 2001. "Lobbying and Welfare in a Representative Democracy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(1), pages 67-82.
    20. James D. Fearon, 1997. "Signaling Foreign Policy Interests," Journal of Conflict Resolution, Peace Science Society (International), vol. 41(1), pages 68-90, February.
    21. Ernesto Dal Bo & Rafael Di Tella, 2003. "Capture by Threat," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1123-1152, October.
    22. Lohmann, Susanne, 1995. "Information, Access, and Contributions: A Signaling Model of Lobbying," Public Choice, Springer, vol. 85(3-4), pages 267-284, December.
    23. de Figueiredo, John M & Silverman, Brian S, 2006. "Academic Earmarks and the Returns to Lobbying," Journal of Law and Economics, University of Chicago Press, vol. 49(2), pages 597-625, October.
    24. Potters, Jan & van Winden, Frans, 1992. "Lobbying and Asymmetric Information," Public Choice, Springer, vol. 74(3), pages 269-292, October.
    25. Brian Kelleher Richter & Krislert Samphantharak & Jeffrey F. Timmons, 2009. "Lobbying and Taxes," American Journal of Political Science, John Wiley & Sons, vol. 53(4), pages 893-909, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marco Di Cataldo & Nicola Mastrorocco, 2022. "Organized Crime, Captured Politicians, and the Allocation of Public Resources [“Mafiaand Public Spending: Evidence on the Fiscal Multiplier from a Quasi-Experiment]," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 38(3), pages 774-839.
    2. Nicola Mastrorocco, 2018. "Organised Crime, Captured Politicians and the Allocation of Public Resources," Trinity Economics Papers tep1018, Trinity College Dublin, Department of Economics.
    3. Rebaz Ali Smail, 2019. "Non-Governmental Organizations Participations and Tactics in Kurdistan Regions Commission of Integrity Lawmaking," International Journal of Social and Administrative Sciences, Asian Economic and Social Society, vol. 4(2), pages 267-276, June.
    4. Benjamin J. McMichael, 2017. "The Demand for Healthcare Regulation: The Effect of Political Spending on Occupational Licensing Laws," Southern Economic Journal, John Wiley & Sons, vol. 84(1), pages 297-316, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Matilde Bombardini & Francesco Trebbi, 2020. "Empirical Models of Lobbying," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 391-413, August.
    3. Martin Gregor, 2016. "Tullock's Puzzle in Pay-and-Play Lobbying," Economics and Politics, Wiley Blackwell, vol. 28(3), pages 368-389, November.
    4. Gregor Martin, 2015. "To Invite or Not to Invite a Lobby, That Is the Question," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 15(2), pages 143-166, July.
    5. Reuben E., 2002. "Interest groups and politics: The need to concentrate on group formation," Public Economics 0212001, University Library of Munich, Germany.
    6. Olper, Alessandro, 2017. "The political economy of trade-related regulatory policy: environment and global value chain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(3), February.
    7. Ganesh Manjhi & Meeta Keswani Mehra, 2019. "A Dynamic Analysis of Special Interest Politics and Electoral Competition," Dynamic Games and Applications, Springer, vol. 9(1), pages 142-164, March.
    8. Thomas Groll & Anja Prummer, 2016. "Whom to Lobby? Targeting in Political Networks," Working Papers 808, Queen Mary University of London, School of Economics and Finance.
    9. Thomas Groll & Anja Prummer, 2016. "Whom to Lobby? Targeting in Political Networks," Working Papers 808, Queen Mary University of London, School of Economics and Finance.
    10. Tatyana Chesnokova, 2010. "Lobby Interaction and Trade Policy," School of Economics and Public Policy Working Papers 2010-04, University of Adelaide, School of Economics and Public Policy.
    11. Thanh Le & Erkan Yalcin, 2023. "Lobbying, political competition and the welfare effect of campaign contribution tax," Scottish Journal of Political Economy, Scottish Economic Society, vol. 70(2), pages 158-179, May.
    12. Francisco Candel-Sánchez & Juan Perote-Peña, 2018. "Endogenous market regulation in a signaling model of lobby formation," Journal of Economics, Springer, vol. 123(1), pages 23-47, January.
    13. Thomas Groll & Christopher J. Ellis, 2013. "Dynamic Commercial Lobbying," CESifo Working Paper Series 4114, CESifo.
    14. Le, Thanh & Yalcin, Erkan, 2018. "Lobbying, campaign contributions, and electoral competition," European Journal of Political Economy, Elsevier, vol. 55(C), pages 559-572.
    15. Martin Gregor, 2014. "Receiver's access fee for a single sender," Working Papers IES 2014/17, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2014.
    16. Schnakenberg, Keith & Turner, Ian R, 2023. "Formal Theories of Special Interest Influence," SocArXiv 47e26, Center for Open Science.
    17. Groll, Thomas & Ellis, Christopher J., 2014. "A simple model of the commercial lobbying industry," European Economic Review, Elsevier, vol. 70(C), pages 299-316.
    18. 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.
    19. Cotton, Christopher, 2015. "Competing for Attention," MPRA Paper 65715, University Library of Munich, Germany.
    20. Marianne Bertrand & Matilde Bombardini & Raymond Fisman & Brad Hackinen & Francesco Trebbi, 2021. "Hall of Mirrors: Corporate Philanthropy and Strategic Advocacy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(4), pages 2413-2465.

    More about this item

    Keywords

    interest groups ; influence ; contributions ; lobbying ; issue advocacy;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:68637. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.