Thomas Groll, Lecturer in International and Public Affairs at Columbia University, and journalist Sebastian Jones presented the Lab seminar on December 2, 2014, on the practice of lobbying and an economic model to explain it.
Groll studies lobbying from an economic perspective, and is interested in informational lobbying and resource transfers. Lobbying is a multi-billion dollar industry in the United States, with contracts as high as $10 million, and is characterized by repeated personal interactions between lobbyists and policy makers.
In the first of two projects in this area, Groll studied why this is the case when commercial lobbying firms act as intermediaries in interactions with policymakers. When lobbyists from commercial lobbying firms meet with policymakers, they are making use of the key resource in this arena, political access. Clients hire lobbyists to meet with policymakers and present information on and analysis of policies under consideration. The information can be useful in broadening the policymaker’s understanding of the issue, but only if it is reliable. Policymakers are usually in need of both information (information problems) and money to fund campaigns (contracting problems). But the policymaker cannot be sure how reliable such information is. So how can they solve this information problem?
Groll argues that the repeated interactions between the policymaker and an individual lobbyist allow the policymaker to evaluate the quality of that lobbyist’s information. If the lobbyist wants to retain access to the decisionmaker, it is in her interests to provide reliable information. The policymaker can offer the reward of future access if the promised resources are ultimately received, which in turn induces the lobbyist to invest in the relationship by holding up her side of the deal; for example, by doing research and presenting the results to the policymaker. If she does not, the policymaker can simply deny her access and move to a new relationship with a different lobbyist. The welfare implications of these arrangements depend on whether the interactions solve the contracting (campaign funding) problem or the information problem. Improved information flow can potentially increase public welfare.
In his second project, Groll studies lobbying as “costly persuasion,” in which both special interests and policymakers expend significant resources to gather information for use in making policy. Groll uses the example of Merck’s campaign to support a new vaccination: it provided information on its usefulness to policymakers, lobbied to have the vaccination made mandatory, conducted market research, and mobilized policymakers to support their position.
For the most part, Groll leaves aside the issue of money paid directly for policy changes in favor of examining the costs of gathering information and “legislative subsidies,” which occur when special interest group funds support the legislative drafting process. His primary questions were first, when does costly persuasion and legislative subsidies arise, and second, when are they used separately rather than together. When the policymaker does not have constrained resources, Groll concluded that the special interest group would provide information but not legislative subsidies. If the policymaker does have resource constraints, the interest group will likely use both strategies. The special interest will base its tactics on the current view the policymaker holds: a lobbyist is more likely to approach skeptical or optimistic policymakers, as there is no reason to offer significant support to a lawmaker who already agrees with you.
One special case is the perceived bribe. If a policymaker makes a statement critical of a proposal, and then after receiving a financial contribution from an interested a special interest group changes her mind, the financial contribution could be a bribe. However, it could also be that the financial contribution allowed the policymaker to gather information that informed the changed point of view.
Sebastian Jones presented work on the rise of the public relations industry in Washington D.C. and the accompanying loss of transparency. Under the law, you must register as a lobbyist if you earn over $2500 from lobbying in 90 days, have two or more lobbying contacts (along the lines of those Groll described in his presentation) during that time, and spend at least 20% of your time lobbying during those 90 days. Jones proposes a different definition, which calls “any professionally organized and funded activity that aims to influence government policy, lawmaking and regulation (or lack thereof)” lobbying.
After a discussion of the history of modern lobbying in the U.S., Jones highlighted some changes in lobbying oversight in the 2000s. In 2007, the Honest Leadership and Open Government Act passed. Lobbying spending went up for a few years. Subsequently, individuals began to use the “Daschle loophole” and became consultants, advisers or PR people rather than “lobbyists.” Huge PR conglomerates then began buying lobbying firms, and PR spending increased dramatically; the biggest PR firms bring in about two times more than the biggest lobbying firms.
A typical Influence campaign includes creating and disseminating white papers and other supporting research, sometimes with think tanks involved; setting up television appearances; planting op-eds in the news; mounting enormous ad campaigns, targeted at a particular audience; and hosting social or professional events, among other tactics. As examples, Jones showed video clips of news items featuring people with vested interests presented as experts on the issues. The problem of unrevealed bias is not solely the fault of the “experts.” Sometimes, even when the consultants, advisers, and/or public relations specialists disclose their allegiances to news outlets, the outlets may choose not share that information publicly for their own reasons.
During discussion of the presentations, Jones noted that a congressional staff could often be quite small, ensuring that many will need help with gathering information on some of the massive policy proposals on which they must make decisions. This lead to a question about the biased nature of the information provided to policymakers, given that diffuse public interests do not often lead to hired lobbying. Groll argued that information couldn’t be very biased, as the lobbyist needs to protect their reputation, and providing biased information could damage it instead. However, as Jones noted, the value of information provided is often only determined years after a policy is enacted and results observed. If the information proves to be bad, but the policymaker to whom it was given no longer holds elected office, there won’t be any harm to the lobbyist. Groll noted that his future research might include analysis of the impact that policymakers’ choices, based on information received from lobbyists, have on future political success.