Time to Regulate Lobbying!
Policy Brief linked to Regulating Lobbying: A Global Comparison (Second Edition)
Lobbying, which our book defines as the act of individuals or groups, each with varying and specific interests, attempting to influence decisions taken at the political level, is a legitimate and accepted profession in the world of politics. Societies are complex, and both public and private interests through lobbying find an efficient way of representing their interests beyond the usual channels of representation embodied by political parties. As a result, over the last decade, the lobbying industry has expanded in all contemporary democracies, with particularly high growth rates in new democracies or growing economies.
Coined in the United States, the term ‘lobbying’, has however been for decades associated to corruption and undue influence. If we had to draw a portrait of a lobbyist popular in Netflix series, such as House of Cards, we would picture a person with excellent communication skills, deep knowledge of the policy-making process, connections with the world of politics and means to influence the decision-making process through rhetoric, pressure, blackmail or bribe. This picture is however not only false for 99% of the industry, but also misleading for the public and policymakers themselves.
In our second edition of Regulating Lobbying: A Global Comparison we provide an analysis of lobbying as a highly professionalised activity that is important for policymakers (you can download chapter 1 on this website).
Lobbyists provide government with technical and political expertise that would otherwise not be available. Their activity is therefore central to a healthy democratic system.
Corruption however still exists in contemporary democracies. Even the clean Northern European democracies are from time to time hit by cases of bribery, misuse of public funds or influence peddling.
[Special Issue on Lobbying Regulations and Corruption Across the World]
Even when political systems are free from corruption, the work of lobbyists can appear to overload the policy-making process. Images of a crowded Parliament, almost occupied by lobbyists are quite popular.
The number of lobbyists itself is not a problem. The more information and expertise a government can take in, the better it can evaluate whether or not its policy decisions are appropriate. Nevertheless, space in the system of interest representation is limited, and all political science research of the last 60 years has told us that lobbyists representing business interests mostly occupy it.
Here we present our analysis of lobbying regulations in 17 democratic political systems worldwide. Our study has four main objectives:
1. Encourage policymakers to adopt new lobbying regulations
2. Promote best practices in the regulation of lobbying
3. Provide government and the industry with approaches towards regulation taken in other countries
4. Convince lobbyists that the state regulation of their profession is beneficial to their individual activities and the industry as a whole.
Lobbying regulations in short
Lobbying regulations are part of the category of transparency regulations, together with Freedom of Information Laws (FOI) and Open Data Initiatives. Whereas FOI require the government to disclose information about its activities, lobbying regulations require private organizations and lobbyists working for them to disclose information about their activity. Generally, lobbying laws have the following features:
· They define
o Who is a lobbyist
o What can be considered lobbying
· They establish that
o Lobbyists need to register with the state on online registers
o Lobbyists need to say what they are lobbying about
o Lobbyists need to say how much they are spending
· They introduce
o Sanctions for failed, late or false registration (whether that be fines or even imprisonment)
o Cooling-off periods, defined as time restrictions for public office holders before they can enter the lobbying industry after they leave their jobs in politics
Lobbying rules can be more of less robust, where robustness refers to the level of transparency and accountability a regulation can guarantee. High robustness regulations introduce higher levels of transparency and accountability in lobbying than low robustness ones: they have more registration and disclosure requirements, stricter sanctions and longer cooling-off periods. Medium-robustness regulations are an in-between category.
Where in the world is lobbying regulated? (see our map below)
First of all, few countries in the world have lobbying regulations. We analyse 17 in our book, but we know that lobbying has been partially regulated recently in Italy, while other political systems, such as Spain, the Czech Republic are considering the introduction of rules.
How robust are the laws in the 17 political systems worldwide? We used a scale between 0 and 100 to measure robustness, where the closer to 100 the more transparency is promoted with the law. Here are our results showing where the rules examined are low, medium or high robustness regulatory environments (see our table below).
In our book, we tested the validity and the reliability of existing measurements of robustness of lobbying laws (here you will find the data). We discovered that the methodology developed by the Centre for Public Integrity (CPI), calculated using the Hired Guns Methodology and reported above, represents the most adequate existing method to score legislations’ robustness.
That means that if you are a civil servant, a government official, a member of parliament that has developed a proposal to regulate lobbying – or if you are a curious practitioner or a transparency activities that wishes to know how robust a lobbying regulation is – apply the coding methodology to the legislative text and compare the result with our data.
What is our take on this?
In light of our analysis of the regulations’ robustness, we concluded that
· Many existing regulations can be improved
· Unregulated countries should think about regulating lobbying
· Regulated countries can learn from each other and diffuse best practices.
With this idea in mind, the last chapter of our book offers guidelines for policymakers and civil servants that want to regulate lobbying (or strengthen existing rules) in their country. It also outlines guidelines for lobbyists that are interested in consulting government in the process of adoption of lobbying laws. Here are our basic principles:
· The definition of ‘lobbying’ and ‘lobbyist’ can be tricky. We encourage policymakers to develop proposals that regulate formal and informal meetings (physical or via phone/email) with public office holders. Sometimes lobbying laws regulate access to government buildings. This approach is insufficient, as most of the lobbying activity happens outside of institutional buildings.
· It is better to have a wide scope than a narrow one. Some existing lobbying laws only regulate consultant lobbyists only. This approach however, often covers only 1-5% of the existing lobbying industry. We encourage a wide-scope approach that extends to in-house lobbyists working for firms, trade unions, NGOs and voluntary organizations.
· Cover all targets. Lobbying does not only happen in Parliaments. It is important for a lobbying law to cover all ‘hot-beds’ of lobbying. Government Departments, regulatory agencies, local administration, parliamentary staff, departmental special advisors, high-level civil servants are all targets of lobbying.
· Consult with the industry. When developing lobbying rules, policymakers should consult with practitioners. Lobbyists often have clear ideas about what should and should not be part of the regulation. It is important to strike the balance between the agenda of the government and the needs of the industry. After all, the regulation targets predominantly the latter.
· International organizations can offer insights. The Council of Europe and the Organization for Economic Cooperation and Development are avant-garde organizations when it comes to provide recommendations to regulate lobbying. Other existing sources of expertise are the Open Government Partisanship, and of course, academics like us.
· We should know how much money is spent in lobbying. Research shows that money does not buy influence. But most of the negative perceptions about lobbying come from the use of money in politics. It is therefore necessary to introduce transparency in lobbying expenditures: how much is spent and for what purposes. We encourage policymakers to accompany such provisions with rules about disclosure of political donations and restriction of gift-giving.
· Regulate revolving doors. Much of the cases of influence peddling and situations of conflict of interest arise from the revolving doors between public office and the lobbying industry. Cooling-off periods are an excellent way to reduce the risks associated with these practises. The general period is of 1 or 2 years. Do not introduce exceptions and do not go beyond this timeline. Longer periods might infringe a person’s right to earn a living.
· Enforcement and implementation are crucial. We observed many cases of lack of enforcement or weak implementation. Toothless regulations are only symbolic. Even voluntary systems can build up reputation and meet sufficient levels of compliance. But data tell us that when implementation is weak, registration levels are low. When regulatory authorities do not have the power to audit the data or impose sanctions, lobbying under the regulatory radar prevails and registration rates will be low. We argue that three elements are crucial for a successful implementation:
o Independent authorities should administer lobbying registers. Political, or industry, control of register of lobbyist can harm the efficiency of the regulation.
o Independent monitoring authorities should have the power to enforce sanctions. Sanctions are a real threat. Without punishment there is no incentive for compliance. Another power of the authority should concern the periodic review of the content of the regulation.
o Independent monitoring authorities should have enough staff to carry out their responsibilities. Our observations of existing registers suggest that authorities are often understaffed.
Concluding remarks
Lobbying is a necessary and legitimate part of any modern democracy. While only 4 political systems were regulated in the 1900s, this number has increased over four fold in the last 20 year. Lobbying regulation thus represents a key transparency policy being taken up worldwide at an exponential pace. Our book explains where lobbying is regulated, how the rules compare to each other, and what the different regulatory environments are. Given our own experience on having advised governments on how to regulate lobbying, we also offer key insights on how to make, or amend, a law for countries that say it is time to do it!
Authors:
Raj Chari, Trinity College Dublin (charir@tcd.ie)
John Hogan, Technological University Dublin (john.hogan@dit.ie)
Gary Murphy, Dublin City University (gary.murphy@dcu.ie)
Michele Crepaz, Trinity College Dublin (crepazm@tcd.ie)