Mining for Favors: The Impact of Lobbying on Regulatory Enforcement

Abstract

Serious industrial accidents have over the last decade generated claims that industries are wielding political influence to ``disarm'' their regulators. In context of the U.S. mining industry, such claims present a puzzle because the regulatory process of the U.S. mining sector is designed to make it impermeable to political influence. In this study I evaluate empirical evidence on systemic regulatory capture in U.S. mining by combining detailed records on mines' regulatory outcomes with mine owners' transactional lobbying data. Accounting for non-random selection into lobbying and potential reverse causality inherent in issue-specific lobbying, I first ask whether lobbying for safety and health issues has a statistically significant effect on safety and health inspection outcomes (it does). Then I evaluate at what stage of the regulatory process benefits to lobbying accrue (at the appeals stage). Mine owners that lobby for labor-specific issues appear to be more effective at disputing financial penalties than mine owners that do not lobby for labor issues. Although these results hold for all firms in the industry, providing evidence in favor of systemic capture, they do not fit a traditional regulatory capture story because the benefits to lobbying accrue beyond the regulator's jurisdiction.