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Corporate Lobbying

Lee Drutman

Over the past four decades, large corporations have learned to play the Washington game. Companies now devote massive resources to politics, and their large-scale involvement increasingly redirects and constricts the capacities of the political system. The consequence is a democracy that is increasingly unable to tackle large-scale problems, and a political economy that too often rewards lobbying over innovation.

Prior to the 1970s, few corporations had their own lobbyists, and the trade associations that did represent business demonstrated nothing close to the scope and sophistication of modern lobbying. In the 1960s and the early 1970s, when Congress passed a series of new social regulations to address a range of environmental and consumer safety concerns, the business community lacked both the political will and the political capacity to stop it. These new regulations, combined with the declining economy, awoke the sleeping political giant of American business. Hundreds of companies hired lobbyists for the first time in the mid-1970s, and corporate managers began paying attention to politics much more than they ever did before.

When corporations first became politically engaged in the 1970s, their approach to lobbying was largely reactive. They were trying to stop the continued advancement of the regulatory state. They were fighting a proposed consumer protection agency, trying to stop labor-law reform, and responding to a general sense that the values of free enterprise had been forgotten and government regulation was going to destroy the economy. They also lobbied as a community. Facing a common enemy (government and labor), they hung together so they wouldn’t hang separately. But as the labor movement weakened and government became much more pro-industry, companies continued to invest in politics, becoming more comfortable and more aggressive. Rather than seeing government as a threat, they started looking to government as a potential source of profits and assistance. As companies devoted more resources to their own lobbying efforts, they increasingly sought out their own narrow interests. As corporate lobbying investments have expanded, they have become more particularistic and more proactive. They have also become more pervasive, driven by the growing competitiveness of the process to become more aggressive.

External events may drive initial corporate investments in Washington. But once companies begin lobbying, that lobbying has its own internal momentum. Corporate managers begin to pay more attention to politics, and in so doing they see more reasons why they should be politically active. They develop a comfort and a confidence in being politically engaged. And once a company pays some fixed start-up costs, the marginal costs of additional political activity decline. Lobbyists find new issues, companies get drawn into new battles, and new coalitions and networks emerge. Managers see value in political engagement they did not see before. Lobbying is sticky.

Lobbyists drive this process. They teach companies to see the value in political activity. They also benefit from an information asymmetry that allows them to highlight information, issues, and advocacy strategies that can collectively make the strongest case for continued and expanded political engagement. Because corporate managers depend on lobbyists for both their political information and strategic advice, lobbyists are well positioned to push companies toward increased lobbying over time.

But what effect has it all had on public policy? Social science research on political influence has found no relationship between political resources and likelihood of success. However, the lack of a direct, statistically significant correlation does not mean that there is no influence. It just means that the influence is unpredictable. The policy process is neither a vending machine nor an auction. Outcomes cannot be had for reliable prices. Policy does not go to the highest bidder. Politics is far messier and far more interesting than such simplistic models might suggest. And almost certainly, the increased competition for political outcomes has made it even more unpredictable.

Sometimes lobbying can be very influential, but its influence is contingent on so many confounding factors that it does not show up reliably in regression analysis. Yet the study of influence is a fundamental question of politics. Rather than looking for vote buying or expecting resources to correlate predictability with policy success, we must think bigger. We must understand the ways in which increases in lobbying activity shape the policy-making environment and how the changing environment may allow some types of interests to thrive more than others. The current political environment benefits large corporations for several reasons, which I will examine here.

The first reason is that the increasingly dense and competitive lobbying environment makes any major policy change very difficult. As more actors have more at stake, every attempt to change policy elicits more calls from more voices. In a political system whose many veto points already make change difficult, the proliferation of well-mobilized corporate lobbying interests, all with their own particular positions and asks, means that there are more actors with the capacity to throw more sand into the already creaky machinery of the multistage policy process. In order for any large-scale change to happen, lobbying generally must be one-sided. To the extent that large corporations benefit from the status quo, a hard-to-change status quo benefits large corporations.

But while the crowded political environment may make legislation harder to pass in general, it also makes the legislation that does pass more complicated (more side bargains). Large companies are more likely to have the resources and know-how to push for technocratic tweaks at the margins, usually out of public view. This contributes to what Steven Teles calls the “complexity and incoherence of our government.” Teles notes that this complexity and incoherence has a tendency to “make it difficult for us to understand just what that government is doing, and among the practices it most frequently hides from view is the growing tendency of public policy to redistribute resources upward to the wealthy and the organized at the expense of the poorer and less organized.” The more complicated things become, the more of an advantage it is for corporate lobbyists looking to influence the out-of-sight, hard-to-understand, but sometimes highly consequential nooks and crannies of the U.S. code.

The increasing complexity of policy also makes it more difficult for generalist and largely inexperienced government staffers to maintain an informed understanding of the rules and regulations they are in charge of writing and overseeing. They typically have neither the time to specialize nor the experience to draw on. As a result, staffers must rely more and more on the lobbyists who specialize in particular policy areas. This puts those who can afford to hire the most experienced and policy-literate lobbyists—generally large companies—at the center of the policy-making process. Increasingly, corporations are not just investing in direct lobbying but also in think tanks and academic research and op-eds and panel discussions in order to shape the intellectual environment of Washington—to make sure that certain frames and assumptions come to mind immediately and easily when policy-makers consider legislation and rules.

From Congress edited by Benjamin Ginsberg and Kathryn Wagner Hill. Published by Yale University Press in 2020. Reproduced with permission.

Lee Drutman is a senior fellow in the program on political reform at the New America Foundation and a visiting fellow at GuideStar USA. Benjamin Ginsberg is the David Bernstein Professor of Political Science at Johns Hopkins University and chair of the Hopkins Center for Advanced Governmental Studies. Kathryn Wagner Hill is director of the Center for Advanced Governmental Studies at Johns Hopkins.

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