Lobbying is one of the most fundamental political activities in representative democracies. It is crucial in the shaping and enactment of public policies. Despite, or maybe because of this, lobbying is highly controversial. The heated debates in the public often operate on murky ground, with little or circumstantial evidence. Before jumping to normative conclusions about lobbying, it is advisable to take one-step back and ask what lobbyists do and which effects lobbying produces.
Politicians decide on public policies in an inherently uncertain world, where it is impossible to fully anticipate the effects of policies. In this world, plagued by fundamental uncertainty, one of the main activities of interest groups is to provide information to policymakers because they have better knowledge about specific effects and aspects of public policies. A manager of a company, for example, is better informed about the cost structure of production and is therefore better able to assess how many people will have to be laid off in response to a tax reform or stricter environmental regulation. This asymmetry drives demand for information by politicians who seek to draft better public policies (Esterling 2004; Truman 1971). Matters become complicated because interest groups are self-interested political actors, pushing for their own agenda. The manager may want to exaggerate the consequences of a tax reform to get a more beneficial outcome for the company. When will interest groups share their information truthfully with policymakers and when will they try to misrepresent the information? The answer to this question depends on the communication strategy of interest groups.
This book1 contributes both theoretically and empirically to the ongoing debate of how interest groups choose a lobbying strategy. To advance the debate, I focus on a clearly specified mechanism which identifies the conditions under which lobbying can be influential and how influence depends on the strategy chosen while the strategy choice depends on the expected influence.
The choice of lobbying strategies has received much attention in the literature. Two sets of variables are commonly highlighted in explanations of interest group strategies: Group characteristics, such as their type and resources and the issue context (Baumgartner and Leech 1998). Empirical studies which analyze interest group behavior often survey interest groups to elicit information about the determinants of their behavior (see Baumgartner and Leech 1998 for an extensive survey). Some studies elicit the network structure or try to explain network formation as part of lobbying strategies (Heinz et al. 1993; Laumann and Knoke 1987). Other studies enhance our knowledge about lobbying tactics and systems, e.g. in the European Union (Greenwood 2007; Dür and Mateo 2016), the United States (Baumgartner et al. 2009) or in a comparative perspective (Mahoney 2008). These studies built on an impressive collection of data and describe patterns and tactics. However, much of the explanation rests on a classical distinction of interest group types.
Influencing policy outcomes is the ultimate goal of an interest group. In consequence, it is necessary to analyze the interest groups’ actions from their perspective. When trying to explain interest group behavior it is vital to understand how the political system and its channels of influence look from the group’s perspective. This book is a first attempt to embrace this perspective.
I distinguish interest group lobbying strategies based on a set of structurally equivalent communication acts. Two aspects of these classes of lobbying activities are important here. First, interest group activities are conceived as communicative acts. This approach acknowledges that all activity has the potential to transmit information from interest groups to decision-makers. Second, the distinction between public and private communication is crucial. The main difference between the classes of activities is the mode of the communication, i.e. whether it is observable or not. I show that the approach can be used to enhance our understanding of interest group communication strategies beyond the classical approach based on the group types or the insider/outsider distinction. I, therefore, offer a complementary explanation which captures much of the variation in interest group activities which is not covered by the more classical approaches.
Two interrelated decisions have to be analyzed. When do interest groups become active? and what do interest groups do once they mobilize? Interest groups have a choice between many communication strategies (including noncommunication). My approach allows to develop a coherent framework to study the two interrelated decisions, which are usually studied in relative isolation. It asks how the world looks like from an interest group’s point of view to improve our understanding of their actions.
My explanation of interest group strategy choice explicitly connects group characteristics and context variables. Particular emphasis is put on the role of interest group preferences and the bargaining environment, in which lobbying is embedded. The approach has implications for how to best assess lobbying strategies. Identifying the causal mechanism which links interests and institutions is central for the understanding and explanation of interest group behavior. Based on a formal model, I demonstrate, that lobbying strategies can be understood and explained when situated in the context of legislative bargaining.
Interest groups seek to influence public policies. The question of why interest groups use a specific strategy to influence a policy is often conflated with the question why they use a specific tactic to influence a decision-maker. Political decisions are the result of political bargaining. Influencing a political actor is a means to influence an outcome and the activity has to be understood as such. This point is evident in the analysis of König (1992). His analysis rests on a series of Coleman models which are purely probabilistic in nature. While serving as a first approximation, the models lack a strategic component and the precision required to identify the causal mechanism.
Contrary to this approach, I draw on signaling models of lobbying in the tradition of models, such as Austen-Smith (1993), Potters and van Winden (1992), or Sloof (1998). At the core of these models is the assumption of an informational asymmetry between the interest group and the decision-maker. Interest groups possess better information about how policies translate into policy outcomes. Decision-makers face uncertainty about this nexus. I call this uncertainty fundamental uncertainty as it relates to fundamental processes in the social and physical world. The uncertainty of political decision-makers about the effects of policies is one of the driving factors which shapes the demand for lobbying (Truman 1971; Esterling 2004).
The decision-making process is shaped by institutions. Therefore, one has to analyze institutions and the way they determine incentive structures for decision-makers. A novel approach to the study of interest group strategies along these lines is proposed. I provide an explanation of interest group behavior as the result of incentives for strategic action created by the link between group activity and public policies as mediated by the political process. Interest groups interfere with the bargaining process of political actors. The institutions which structure legislative bargaining therefore determine how interest group activities translate into policies. This influence is necessarily incomplete, even if interest groups influence all political decision-makers. The reason is the conflict of interest of the decision-makers, which has strong implications for the willingness to lobby and the choice of strategy.
When choosing lobbying strategies, interest groups need to form an expectation about the likely policy outcomes. The final policy is agreed on in bargaining process between decision-makers, e.g. the chambers in a bicameral legislature or the coalition partners in a unicameral setting. Policies may vary because interest groups determine the distribution of information in the bargaining arena by choosing a specific lobbying strategy. Thus, interest groups themselves operate in an uncertain environment. They are unable to predict the exact outcome of the bargaining process when choosing a course of action. But they may be able to predict a range of possible or likely outcomes. I show both theoretically and empirically that this process uncertainty is an important determinant of interest group strategy choice.
My book starts with a discussion of the current state of our knowledge about interest group strategies and political bargaining, which serves to prepare the ground for the heart of the book, the formal model of interest group strategy choice. In particular, I demonstrate the importance of information and communication for lobbying. I then discuss the approaches to bargaining and how it creates uncertainty from an interest groups point of view.
The next step is the development of a formal model of interest group activity. The main novelty is the integration of a signaling model of lobbying with a model of veto bargaining. In contrast to most other formal models of lobbying, which were developed with the context of the American Congress in mind, the model explicitly focuses on a parliamentary system with high party discipline. In this model, interest groups can choose between sending a private message to one of the two decision-makers and sending a public message to both. The distinction is roughly equivalent to the classical inside and outside lobbying terminology. However, the implications are quite different.
Pro-change groups are more constrained in their lobbying behavior. The decision-maker which prefers a smaller move away from the Status Quo effectively determines the room for maneuver in the political system. This does not only affect the other decision-maker in terms of bargaining outcomes, but also the interest group’s lobbying strategy. Pro-change groups are more likely to prefer private messages to the constraining actor over public messages, as they need to loosen the constraint. The more interest groups want to prevent a change of the Status Quo, the more likely they are to send a public message. They are unable to prevent the policy change, but they are able to reduce the variation of policies (i.e. the uncertainty), which makes them better off.
The model also demonstrates that under a wide range of circumstances, interest group influence on actual policy outcomes is very limited. However, they will reduce the variance of outcomes considerably. This raises the suspicion that many scholars are looking in the wrong...