Lobbying, Corruption and Other Banes

48 Pages Posted: 13 Sep 2008

See all articles by Nauro F. Campos

Nauro F. Campos

University College London; University of Michigan at Ann Arbor - The William Davidson Institute; IZA Institute of Labor Economics

Francesco Giovannoni

University of Bristol - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: September 1, 2008

Abstract

Although the theoretical literature often uses lobbying and corruption synonymously, the empirical literature associates lobbying with the preferred mean for exerting influence in developed countries and corruption with the preferred one in developing countries. This paper challenges these views. Based on whether influence is sought with rulemakers or rule-enforcers, we develop a conceptual framework that highlights how political institutions are instrumental in defining the choice between bribing and lobbying. We test our predictions using survey data for about 6000 firms in 26 countries. Our results suggest that (a) lobbying and corruption are fundamentally different, (b) political institutions play a major role in explaining whether firms choose bribing or lobbying, (c) lobbying is more effective than corruption as an instrument for political influence, and (d) lobbying is more powerful than corruption as an explanatory factor for enterprise growth, even in poorer, often perceived as highly corrupt, less developed countries.

Keywords: lobbying, corruption, political institutions

JEL Classification: E23, D72, H26, O17, P16

Suggested Citation

Campos, Nauro F. and Giovannoni, Francesco, Lobbying, Corruption and Other Banes (September 1, 2008). William Davidson Institute Working Paper No. 930, Available at SSRN: https://ssrn.com/abstract=1267355 or http://dx.doi.org/10.2139/ssrn.1267355

Nauro F. Campos (Contact Author)

University College London ( email )

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University of Michigan at Ann Arbor - The William Davidson Institute

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IZA Institute of Labor Economics

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Francesco Giovannoni

University of Bristol - Department of Economics ( email )

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University of Bristol
Bristol, BS81TU
United Kingdom
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+44 117 928 8577 (Fax)

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