Lobbying, special interests and “buying” influence: What research tells us, and remaining unanswered questions

2014 literature review by Duke University and U.T. Austin in Annual Review of Political Science on the state of research on lobbying and its influence on political outcomes.

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Lobbying, special interests and “buying” influence: What research tells us, and remaining unanswered questions

by Alexandra Raphel, The Journalist's Resource
September 4, 2014

The notion of a government “by the people, for the people” is one of the bedrock concepts of American democracy, but the reality is that policy outcomes are often influenced by a wide range of factors, not merely the candidates whom voters select to represent them on Election Day.

“Special interests” and lobbyists are often derided for their perceived distortion of the democratic system, although there is a case to be made that the battle of organized interest groups has always constituted the essence of democracy. Still, certain kinds of representation frequently raise hackles — arms and oil industry lobbying, for example, or former U.S. Senators reportedly representing Russian banks that are the target of sanctions. Further, what critics most object to is the way that money buys access, and here there is ample evidence of new, troubling changes in the U.S. system: In a single decade, between 2000 and 2010, the amount spent on lobbying Congress and the federal agencies more than doubled, according to the Center for Responsive Politics, which curates useful data on the issue. Although the aggregate amount spent on lobbying has technically declined slightly, many believe that the practice of “soft lobbying” has meant that some lobbying money is now going “dark” — and is not being formally reported.

According to survey data from the American National Election Studies series, an increasing number of Americans believe that government is run to serve a few large interests rather than for the benefit of all — indeed, over the past four decades, the public’s views on this have radically shifted toward a more skeptical position. Beyond perceptions, however, what does the best research reveal about this situation? How much do we really know? In a 2014 literature review, “Advancing the Empirical Research on Lobbying,” John M. de Figueiredo of Duke and Brian Kelleher Richter of the University of Texas, Austin, provide an overview of leading scholarship, as well as suggest promising social science methods and new data sources. The paper, published in the Annual Review of Political Science, notes that, over the past decade, research on lobbying has “progressed substantially,” but large questions remain. The researchers therefore set out to synthesize “what we know about lobbying, what we would like to know about lobbying, and how we might make headway in finding answers.”

Key findings from the review include:

• Lobbying is widespread throughout the U.S. political system; previous research puts lobbying expenditures at the federal level at approximately five times those of political action committee (PAC) campaign contributions. For instance, in 2012, organized interest groups spent $3.5 billion annually lobbying the federal government, compared to approximately $1.55 billion in campaign contributions from PACs and other organizations over the two-year 2011-2012 election cycle.
• Corporations and trade associations comprise the vast majority of lobbying expenditures by interest groups — more than 84% at the federal level — compared with issue-ideology membership groups, which makes up only 2% of these expenditures.
• While lobbying is presumed to be influential, the actual rate of firms engaging in lobbying is relatively low — approximately 10% of all firms.
• Large corporations and groups are more likely to lobby independently than smaller groups, which tend to lobby through trade associations. Some researchers suggest that smaller groups lack the resources to cover the high fixed costs of a lobbying organization.
• Lobbying efforts often increase when (1) the issues in question are considered more salient; (2) there are high stakes for the organized interest based on certain policy outcomes; and (3) the policy issue is related to budgeting or taxation issues.
• There is mixed evidence on the question of whether lobbyists derive more value from what they know (expertise) or whom they know (personal connections). The fact that some lobbying firms specialize in certain policy areas suggests that issue expertise could be valuable. However, other research suggests the connections might be more important; a study examining revenue of former legislative staffers who become lobbyists found that a lobbyist’s revenue declined 23% after the legislator for whom the lobbyist worked was defeated in an election or retired from Congress.
• Determining and quantifying the impact of lobbying on policy outcomes can be challenging given the many other factors that can influence decisions (omitted variable bias). Using quasi-experimental methods — including differences-in-differences and instrumental variables — could better isolate these causal mechanisms.
• New data could also improve research on lobbying. In particular, detailed transactional data over longer time periods, combined with current archival datasets and other external datasets could be valuable. In addition, it could be useful to examine data outside of the United States to determine the generalizability of any U.S.-based empirical work.

The authors conclude by noting the many opportunities for future research in the field of lobbying. Some key questions include: Why do so few firms lobby, relatively speaking? (After all, more than $2 trillion is spent each year by the federal government, so even $3.5 billion in lobbying seems a small amount to compete for that.) Can we quantify the usefulness of connections as opposed to subject matter expertise? How effective is lobbying as a policy instrument as opposed to other forms of interest group pressure, such as media campaigning, endorsements, or grassroots organization?

Related research: For data sources on lobbying, also see the Sunlight Foundation’s Lobbying Tracker. In recent research, Matt Grossman of Michigan State University — author of Artists of the Possible: Governing Networks and American Policy Change since 1945 — explores the political power of interest groups. He highlights the fact that they’re “cited nearly as often as legislators and administrators in stories of policy change.” A 2011 study in the Journal of Public Administration Research and Theory looked at campaign contributions and subsequent government contracts. The researcher analyzed data from 367 firms with corporate PACs active between 1979 and 2006 across a variety of industries, and found that for each additional $201,220 in campaign contributions, a firm could expect to receive an additional 107 contracts on average. This increase translates into roughly $5,300,000 in additional revenues.

Keywords: lobbying, corruption, politics