The Political Roots of Intermediated Lobbying: Evidence from Russian Firms and Business Associations

35 Pages Posted: 31 Dec 2013  

Andrei Govorun

National Research University Higher School of Economics

Israel Marques

National Research University Higher School of Economics

William Pyle

Middlebury College - Department of Economics

Date Written: December 30, 2013

Abstract

How does political competition shape the way that firms pursue legislative change? A rich political economy literature describes various ways in which firms influence the design and enforcement of laws, rules and regulations germane to their business activities. Although helpful, this literature is disconnected from work on legislative accountability and political concentration. Making a distinction poorly developed in prior research, we contrast firms that choose to influence policy directly, through un-mediated contacts with executive and legislative branch personnel, and those that do so indirectly, through lobby groups acting as intermediaries. We propose a simple theory that relates the relative costs of lobbying and the strategies firms select to the extent of political competition and concentration. As competition increases and concentration decreases in a region, the use of indirect channels of lobbying becomes more attractive (and vice versa). We test our theory using a survey of 1013 firms across 61 Russian regions. Exploiting substantial variation in political competition and concentration across Russia’s regions, we find that firms in politically competitive environments, where there is less concentration, are more likely to use business associations to influence their institutional environment. Using a survey of 315 business associations, we show that these effects may be explained by the variation of the willingness of regional decision-making officials to support more or less encompassing policies depending on local political environment.

Keywords: lobbying, democratic institutions, business associations, Russia

JEL Classification: D71, D72

Suggested Citation

Govorun, Andrei and Marques, Israel and Pyle, William, The Political Roots of Intermediated Lobbying: Evidence from Russian Firms and Business Associations (December 30, 2013). Higher School of Economics Research Paper No. WP BRP 46/EC/2013. Available at SSRN: https://ssrn.com/abstract=2373076 or http://dx.doi.org/10.2139/ssrn.2373076

Andrei Govorun (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Israel Marques

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

William Pyle

Middlebury College - Department of Economics ( email )

Munroe Hall
Middlebury, VT 05753
United States
(802) 443-3240 (Phone)

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