Lobbying, Inside and Out: How Special Interest Groups Influence Policy Choices
35 Pages Posted: 17 Dec 2012 Last revised: 15 Jun 2018
Date Written: March 7, 2017
A decision-maker chooses the scope of a reform and anti- and pro-change Special Interest Groups (SIGs) use inside lobbying (i.e. contributions, transfer of information) to bias its content and outside lobbying (i.a. political advertising) to affect its fate. In equilibrium, inside lobbying expenditures are associated with policy compromises, a mark of anti-change SIG influence; outside lobbying activities with comprehensive reforms, a sign of pro-change SIG power. Nonetheless, I find that regressions using inside lobbying as a proxy --- as most empirical studies do --- are likely to yield downwardly biased estimates of SIG influence even absent competition between SIGs or substitutable lobbying activities.
Keywords: special interest group, inside lobbying, outside lobbying, power, threat, promise
JEL Classification: D70, D72, D74, D78, D82
Suggested Citation: Suggested Citation