Influence Of Interest Groups Research Articles

Interest group influence and interinstitutional power allocation in early second-reading agreements: a re-examination of aviation emissions trading

ABSTRACT With the extension of codecision the European Parliament and the Council have pushed for a more rapid adoption of legislative acts. However, this increase in efficiency comes at a political price. It reduces opportunities for the Parliament to be perceived as an arena for political arbitrage. It may also change the playing field for different categories of stakeholders in normatively undesirable ways. This article addresses two widespread claims: business interests may be better equipped to influence the outcome of early adoptions than other groups; and the European Parliament's policy-making powers may not profit from early adoptions despite presumed gains in efficiency. The results of our case study provide some support for both: business stakeholders seem to adapt better to the more secluded setting; and the European Parliament is not achieving its initial goals in this early second-reading adoption.

The Influence of Interest Groups on Government

Interest groups’ influence on government affects economic policy making and has an impact on economic crises. Under Argentina’s convertibility exchange-rate regime until its collapse in 2001, tradable-goods entrepreneurs’ preferences depended on the degree to which the government offered them trade-offs either to offset the loss of competitiveness stemming from the currency peg or to exempt them from the costs of devaluation. For the nontradable sector and investors the costs of maintaining the peg to the dollar were always less than those entailed in abandoning the regime. While the fiscal and external inconsistencies of convertibility reduced the preference of the International Monetary Fund for maintaining convertibility, the cost of changing it induced the Fund to continue financing the Argentine government. Moreover, the influence exerted on the IMF by the governments of countries whose businesses had been affected by the distribution of the cost of abandoning the convertibility discouraged financial collaboration by the foreign assistance organizations during the collapse. La influencia de los grupos de interés sobre el gobierno afecta la orientación de la política económica y tiene su impacto en las crisis económicas. Durante el régimen de convertibilidad en Argentina hasta su colapso en 2001, las preferencias de los empresarios de bienes transables dependían del grado en que el gobierno les ofrecía compensaciones, sea para moderar la pérdida de competitividad derivada de la fijación o para sustraerlos de los costos de la devaluación. Para los empresarios del sector no transable y los inversores financieros los costos de mantener la fijación con el dólar resultaron siempre inferiores que los de salir del régimen. Si las inconsistencias fiscales y externas de la convertibilidad desalentaban la preferencia del FMI por mantener la convertibilidad, los costos de cambiarla indujeron al Fondo a sostener el financiamiento al gobierno argentino. Asimismo, la influencia que ejercieron sobre el FMI los gobiernos de los países cuyas empresas habían sido afectadas en la distribución de los costos del cambio de régimen cambiario desalentó la colaboración financiera de los organismos proveedores de ayuda externa durante el colapso.

The two worlds of lobbying: Washington lobbyists in the core and on the periphery

For decades, political scientists have had two divergent views on lobbyists in Washington. On the one hand they focus on the privileged access of a few groups in balkanized issue niches, and on the other they observe highly inclusive lobbying campaigns where hundreds of lobbyists vigorously compete for policymakers’ attention. Not surprisingly, these disparate observations lead to contradictory conclusions about lobbying tactics, relations with relevant policymakers and the nature of interest group influence. In this article, we make a simple, yet novel, empirical observation: these seemingly incongruent observations of lobbying at the micro level are not inconsistent when we uncover the structure of lobbyists’ interactions at the macro level. That is, both views are correct, depending on the policy context. Using data from 248 543 Lobbying Disclosure Act reports filed between 1998 and 2008 – which consists of 1 557 526 observations of 32 700 individual lobbyists reporting activity in 78 issue areas – we reveal that the Washington lobbying community has a fundamental and stable core–periphery structure. We then document how the empirically derived core–periphery mapping is a superior way to differentiate bandwagon or niche policy domains. As transaction cost theory suggests, we find that policy domains in the core have more in-house lobbyists and more revolving door lobbyists. And, on average, lobbyists active in core domains represent a greater diversity of interests and tend to be policy generalists. The converse is also true. Highly specialized contract lobbyists drift toward those sparsely populated domains in the periphery where they may focus on obscure policy minutiae, relatively free from public scrutiny. Our findings have important implications for the study of lobbying and interest representation. In Washington, there are really two worlds of lobbying. The first world, where most lobbying attention is directed, is one in which we see a great deal of interconnectedness and interest diversity. The second world, home to an overwhelming majority of policy domains, cultivates niche lobbying and policy balkanization. That these two worlds exist simultaneously is precisely why observers fail to agree on what ‘typical’ or ‘average’ lobbying is. We believe that this is why the political science literature on interest groups have been contradictory for so long. The abstract core–periphery structure we uncover also has important practical implications for influence in Washington. At first glance, those highly competitive policy domains in the core appear to embody the pluralistic ideal. However, we show that these conditions give interest groups the incentive to hire revolving door lobbyists, who sell access to former employers – not highly specialized expertise – at a premium. Existing lobbying disclosure and revolving door regulations do little to level the playing field. Washington’s most powerful interests know they need to staff up with large numbers of former government officials if they want to stick out in the crowd. Indeed, it appears to be one of the most effective ways to find a seat at the center of the conversation.

Public opinion and interest group influence: how citizen groups derailed the Anti-Counterfeiting Trade Agreement

ABSTRACTThe Anti-Counterfeiting Trade Agreement (ACTA), which envisages stricter standards for the transnational enforcement of intellectual property rights, received strong support from business groups. Nevertheless, a campaign against the agreement that was initiated by a small number of citizen groups was successful in stopping its ratification in the European Union (EU). This result is puzzling because the anti-ACTA side controlled few material resources and should have found it difficult to have its voice heard on an issue negotiated at the international level. We explain the success of the anti-ACTA campaign by showing how interest groups managed to increase the public salience of the issue; how the increasing public salience motivated a growing number of interest groups to mobilize; and how the resulting dynamic made decision-makers opt against ratification of the agreement. The article advances scholarly understanding of the interaction between lobbying and public opinion and sheds light on the defeat of ACTA.

Defragmenting International Investment Law to Protect Citizen-Consumers: The Role of Amici Curiae and Public Interest Groups

Investment arbitration decisions are often inconsistent. In particular, complaints about the unpredictability of NAFTA Chapter 11 jurisprudence and the difficulties in balancing foreign investors’ interest and public policy are common and unresolved. An examination of the role of interest groups may shed important light on the resolution of that problem as they are involved in the social construction of the meaning and use of NAFTA Chapter 11 through arbitration and public debate. This work discusses the extent to which amici curiae empower public interest groups that seek to protect citizen-consumers. It argues that currently amici curiae provides an extremely narrow list of participation rights to public interest groups that, coupled with economic and political disadvantages in many cases, result in censoring the views of such groups and playing the political role of symbolic accountability. This work proposes an expansive view of amici curiae for public interest groups in light of the potential of the latter to counter the influence of corporate interest groups and to contribute to both minimize NAFTA Chapter 11 inconsistencies and strike a more realistic balance between the public interest and foreign investors’ interest. The overall impact of such expansive amici curiae will probably be the defragmentation of NAFTA Chapter 11, that is to say, public interest groups will be empowered to introduce public interest considerations such as human rights, environmental protection and public health into NAFTA analysis, that are likely to protect the interest of local citizen-consumers. However, that requires not only greater legal powers for public interest groups, but also favorable financial and political conditions for an effective participation of public interest groups in NAFTA disputes. The argument is illustrated with a brief discussion of amici curiae in the context of anti-smoking groups and tobacco policies in Canada affecting particularly vulnerable groups with high rates of tobacco consumption such as aboriginal communities and low-income groups.

How Electoral Institutions Change the Influence of World Trade Integration on Trade Policies

World integration levels influence opportunity costs of maintaining restrictive national trade policies. In an integrated world, restrictive trade policies are more costly than in a context of low overall levels of world market integration. We argue that policy makers can be expected to react to these varying incentives to liberalize the trade regimes of their countries, yet do so not in a uniform fashion across countries. Rather, the responsiveness to changes in levels of world trade integration is conditional upon the electoral system the country in question employs. This is due to the fact that opportunity cost considerations increase in importance with a) the degree to which policy makers are isolated from the influence of protectionist interest groups; and b) the credibility with which losers of integration can be promised compensation. Both aspects weigh more strongly in countries that employ proportional representation as opposed to majority voting. We test this hypothesis using a model of conditional trade policy diffusion where world levels of integration are treated as diffusion influence that is interacted with a measure of the proportionality of a country’s electoral system. Empirical results support the hypothesis. Moreover, it is shown that it is district magnitude as a measure of proportionality rather than the higher number of parties associated with more proportional voting rules that drives the results.

Informational Lobbying and Legislative Voting

In this article I analyze a model of interest group influence on legislative voting through information transmission. The model shows how interest groups may manipulate voting coalitions to their advantage by crafting different messages to target different winning coalitions. Furthermore, if access to legislators is costly, the interest groups prefer to coordinate with allied legislators by providing them with information that helps them to persuade less sympathetic legislators. The model reconciles informational theories of lobbying with empirical evidence suggesting that interest groups predominantly lobby those who already agree with them. The model also makes new predictions about the welfare effects of interest group influence: from an ex ante perspective, informational lobbying negatively effects the welfare of legislators. The results highlight the need for more theories of persuasion that take collective choice institutions into account.The appendices for this paper are available at the following URL: http://ssrn.com/abstract=2612162

Determinants of Corporate Governance Codes

Corporate governance codes are an increasingly prominent feature of the regulatory landscape in many countries, yet remarkably little is known about the determinants of corporate governance reform. Potential determinants include: (1) the diffusion of an international benchmark model of good governance; (2) a country’s legal system; (3) the desire to attract foreign investors; and (4) the influence of interest groups. I construct a proxy for the investor-friendliness of 52 corporate governance codes of different jurisdictions and collect data on the code issuers. I find strong evidence that the drafters of codes emulate international benchmark models and that jurisdictions belonging to different legal traditions use different regulatory strategies, some evidence that portfolio equity inflows are associated with the investor-friendliness of codes, and no evidence that interest groups succeed in affecting rules. The article suggests a method for the modeling of legal evolution, convergence, and the political economy of corporate governance codes.

Pluralism, corporatism and perception of corruption

When people know who is influencing the elected politicians and they may ‘put the rascals out’ in case they feel that the incumbents are corrupt, ceteris paribus, their perception of the level of corruption should not be affected by lobbying. If on the other hand people are not sure which or how many actors are influencing public policy and they are not able to hold the government truly accountable as interest group influence is constant with different governments, people will be more likely to perceive the government as corrupted. The former system is a characteristic of corporatism and the latter of pluralism. This problem is exacerbated by the fact that interest groups with resources such as business groups or firms in pluralist systems are more influential than groups with few resources. Thus, people may perceive pluralist policy-making system as more corrupt than corporatist policy-making system where fewer visible actors have more or less equal weight in the policy-making process. Copyright © 2014 John Wiley & Sons, Ltd.

The evolution and current state of public affairs in Hungary

This paper discusses the recent developments in public affairs in Hungary from a historical perspective. The country's communist/socialist past and the relative novelty of the public affairs industry paint an interesting picture of the evolution and the direction of this field. The paper covers the political and economic processes starting from the transition period through recent events. Although there have been several promising developments in the area of public affairs and corporate lobbying during the last 20+ years, Hungary's increasingly anti‐democratic policies, corruption scandals, and centralized decision‐making processes have hindered the proper functioning of the public affairs profession and have limited the influence of corporations and interest groups in the country. Copyright © 2014 John Wiley & Sons, Ltd.

Russian Modernization: Between the Need for New Players and the Fear of Losing Control of Rent Sources

This paper considers current contradictions in state–business relations in Russia. On one hand, the Russian political elite needs economic growth to keep social stability in the country and to limit mass protesting in big cities. Economic growth is impossible without investment, which explains Russian leaders’ increased interest in improving Russia's business climate. On the other hand, influential interest groups (represented first of all by security and law enforcement agencies) try to expand their control on rent sources in the economy. These groups of interests could strengthen their positions due to fear of political protests. This strong conflict among different groups in the Russian elite creates additional uncertainty for investors and the business community, and can lead to economic recession independent of the level of oil prices and dynamics of global markets. Reversing these negative trends in economic development will be possible only with collective actions of different economic and political actors (including technocrats in federal and regional governments, representatives of large and successful middle-sized business and top-managers of public sector organizations) in the search for pragmatic solutions to the challenges faced by Russian economy and society.

Public Opinion and Interest Group Influence: How Citizen Groups Derailed the Anti-Counterfeiting Trade Agreement

In 2011 and 2012, 31 countries and the European Union (EU) signed the Anti-Counterfeiting Trade Agreement (ACTA), which envisages stricter standards for the transnational enforcement of intellectual property rights. Despite strong support for the agreement from business groups, the anti-ACTA campaign that was initiated by an initially small number of citizen groups was successful in derailing the agreement. This result is puzzling because the anti-ACTA side controlled few material resources and should have found it particularly difficult to have its voice heard on an issue negotiated between governments at the international level. What then explains the success of the anti-ACTA campaign? Our response to this question stresses the complex role of public opinion: interest groups shape public opinion; public opinion shapes interest group behaviour; and public opinion shapes policy outcomes. Using this theoretical framework and relying on nearly 100 interviews with groups active on both sides of the ACTA campaign, we explain how citizen groups derailed ACTA.

Competing interests and the political market for smart growth policy

The broad intent of smart growth is to reduce development in environmentally sensitive areas by limiting the outward expansion of development and redirecting private investment to urban areas. Local decisions that shape and constrain land uses can pit narrow economic interests against broader-based environmental organisations and impact decisions on smart growth. Based on the political market framework, this study specifically examines the influence of pro-growth and smart-growth interest groups on smart growth policies adopted by local governments in the state of Massachusetts, USA. The results suggest both real estate interests and environmental groups influence local policy decisions, and depending on the policy, the characteristics of local political institutions mediate these influences.

Campaign finance regulations and policy convergence: The role of interest groups and valence

Regulation of campaign finance of political parties and candidates is intended to decrease the political influence of special interest groups and enhance the public interest in electoral outcomes. I investigate empirically the consequences of campaign financing regulations and find that public funding leads parties' platforms to diverge whereas ceilings on individual contributions lead to platform convergence to the median voter outcome. I relate these consequences to differences in valence or intrinsic popularity of parties. I also show that platform divergence is associated with a ban on corporate donations and with requirements of public disclosure of parties' income statements.

Campaign Finance and Policymaking: PACs, Campaign Contributions, and Interest Group Influence in Congress

AbstractThe general public is skeptical of our current system of campaign finance and feels that members of Congress are corrupt. Although the scholarly literature on campaign contribution influence is mixed, there is growing consensus that Political Action Committees (PACs) and interest groups do, indeed, have a powerful influence on policymaking in Congress. In this article, the author reviews this literature and discusses how influence occurs. Findings reveal that influence is only very rarely an explicit quid pro quo exchange. Instead, it is typically an ongoing, implicit, reciprocal exchange that impacts multiple stages of the legislative process and yields contributors many dividends, such as softer regulations, lower taxes, and lucrative contracts – none of which are explicitly promised (except in rare cases of full‐blown bribery) but are, nonetheless, regularly granted. The social relationships between contributors and lawmakers are central to this process, as is the ability to get legislators to sway their colleagues.

Civil society lobbying and countries’ climate change policies: a matching approach

Does civil society lobbying affect states’ policies on climate change? Does it facilitate or hamper cooperation towards ‘greener’ policies? Environmental non-governmental organizations (ENGOs) and business lobbying groups alike are increasingly seeking to access states’ negotiation delegations at the United Nations Framework Convention on Climate Change (UNFCCC) in order to affect or even change official delegates’ policies. Previous studies have failed to control for the fact that the set of states that have granted civil society access to their delegations is unlikely to be a random sample. Moreover, the fact that a delegation's policy outputs may converge with the preferences of a civil society group cannot be taken as evidence that it was caused by civil society lobbying. A matching approach that addresses both problems is proposed, which corrects for the non-random assignment of civil society organizations to state delegations and forms quasi-experimental contrasts by sampling a set of ‘most similar’ cases that only differ in their treatment; i.e. civil society lobbying. This approach facilitates a causal interpretation of lobbying efforts. The results indicate that only business groups are likely to exert a causal influence on states’ climate delegations. However, contrary to expectations, these groups appear to have enhanced states’ efforts towards environmentally friendly policies.Policy relevanceWhat impact can non-governmental actors have in influencing states’ policies at the climate change negotiations? This question is addressed empirically using a matching approach, which corrects potential challenges in the research on interest group influence. It is shown that business groups are likely to influence states’ policies at the UNFCCC – unlike green interest groups or civil society in general. In light of these findings, three policy implications are derived that might be of importance for states and non-governmental decision makers alike. Most importantly, ENGOs should refocus their efforts for exerting their influence. ENGOs could make their lobbying more effective by first identifying the states that may be more receptive to their preferences and positions.

Media markets, special interests, and voters

This paper examines the role of mass media in countering special interest group influence. I use the concentration of campaign contributions from Political Action Committees to proxy for special interests' capture of US Senate candidates from 1980 to 2002, and compare the reaction of voters to increases in concentration in two different types of media markets: in-state media markets and out-of-state media markets. Unlike in-state media markets, out-of-state markets focus on neighboring states' politics and elections. Thus, if citizens punish political capture, increases in concentration of special interest contributions to a particular candidate should reduce his vote share in in-state counties relative to the out-of-state counties, where the candidate receives less coverage. I find that a one-standard deviation increase in concentration of special interest contributions to incumbents reduces their vote share by about 0.5 to 1.5percentage points in in-state counties relative to the out-of-state counties. Robustness checks suggest that these results are not driven by omitted Senator characteristics or by differences between in-state and out-of-state counties along dimensions other than the media environment.

Coalition portfolios and interest group influence over the policy process

An interest group coalition exists whenever two or more interest groups collaborate in advocating their public policy agendas. Working together in coalition is one of the most common tactics that interest groups use to advance their interests in the policy process. The extant literature on coalitions emphasizes interest group decisions to participate or not in one coalition, or their strategy toward coalitions in general, but gives insufficient attention to interest group participation in multiple coalitions. To rectify this deficit, this article examines the implications of groups’ participation in multiple coalitions for their ability to influence the policy process. In order to account for interest group involvement in multiple coalitions, we introduce the concept of the coalition portfolio, which is the set of all coalitions within a given area of public policy in which an interest group participates at a particular point in time. The portfolio concept recognizes that interest groups may have a wide variety of coalition strategies depending on the mix of coalitions that they join. Variations in the structure of these portfolios matter both to interest groups and to policymakers. Moreover, coalition portfolios evolve over time as coalitions form and dissolve, and as political conditions adjust over the course of the policy process. We develop and test hypotheses that the change in the composition of coalition portfolios increases the influence of interest groups over public policy when: (i) the number of coalitions in a group’s portfolio gets larger; (ii) the average size of the coalitions in a group’s portfolio gets larger or smaller; and (iii) a group’s portfolio improves its position within the overall network of coalitions. Network position is measured based on the betweenness of interest groups in coalition networks, which gives higher scores to groups that lie on the shortest paths between other groups. We test these hypotheses while accounting for other explanations for interest group influence, including: (i) the group’s position in communication networks; (ii) the group’s number of registered lobbyists working on Medicare; (iii) whether or not the group has a Political Action Committee; (iv) the extent to which a group’s lobbying contacts lean toward one political party; (v) whether or not the group endorsed the legislation in question; (vi) the organization’s age in years; and (vii) whether the group is a citizens advocacy organization, a business advocacy organization or some other organizational type. We evaluate these hypotheses using a study of 115 interest groups involved in the enactment and implementation of the Medicare Modernization Act of 2003. This legislation established an outpatient prescription drug benefit in Medicare – a government health insurance program for the elderly and disabled in the United States – and made other significant changes to the program. We conducted personal interviews with representatives of 102 of these groups. We analyzed data resulting from these interviews using negative binomial and ordinary least squares regression models. The results support Hypothesis (iii); groups gain influence over the policy process when their coalition portfolios increase the extent to which they are situated between other groups in the coalition network. However, interest groups are limited in the extent to which they can create portfolios that have desirable levels of betweenness because network position is also a function of membership decisions made by all other groups in the network. These results provide insight into how the composition of coalition portfolios affects the ability of interest groups to exert influence over the policy process. This analysis is most directly applicable to policy debates over complex pieces of legislation.

The Uneasy Promise of Deposit Insurance: Financial Globalization and the Protection of Savers

Institutionalized guarantees of saving deposits are, in addition to financial supervision and the central banks' role as lender of last resort, traditional key instruments of states to ensure the economic security of individuals and the stability of financial systems. As such, they are a crucial fundament of modern political economies. Financial globalization and the financialization of savings have increasingly undermined these safety nets. This article argues that these phenomena have not only led to a new precariousness of individual provisions for the future, but also resulted in a flurry of activities by states to bolster existing arrangements to protect savers. Such efforts will be limited in their effectiveness as long as substantial variations exist among different national protective systems. I argue that such differences can partly be explained by the embeddedness of deposit protection systems in different varieties of financial capitalism. This institutionalist explanation has to be supplemented by a theory of interest group influence which emphasizes how concentrated interests manage to push through their preferences and block reform efforts in the global regime of protecting savers. These entrenched interests make it unlikely that current harmonization efforts, as advanced by the Financial Stability Board and the European Union, will be successful.

The Politics of Compliance with Adverse WTO Dispute Settlement Rulings in China

Starting from 2004, China's trading partners, in particular the United States, have increasingly utilized the World Trade Organization (WTO) dispute settlement system (DSS) to challenge China's trade-related measures. As a major player in world trade, how China responds to adverse rulings is not only important to its trading partners, but also for the future of the international trade regime. China has thus far held a relatively good compliance record when facing adverse panel and/or Appellate Body rulings, except for the recent delay in full compliance in China—Publications and Audiovisual Products. Through examining the factors affecting China's decision making when targeted in a WTO dispute, this article finds that, in general, China is highly motivated to comply with the WTO DSS due to the reputational costs of noncompliance. Nevertheless, the recent delay in compliance in China—Publications and Audiovisual Products also demonstrates that successful implementation could be impeded by certain politically influential interest groups, especially when the measure at dispute is politically sensitive.