Is U.S. Federal Lobbying More About Nefarious Corruption or Benign Industry-Information Provision? Evidence from Foreign-Firm Lobbying in the U.S.

Abstract

Prior literature is at an impasse between those studies arguing that U.S.-style legal corporate lobbying is primarily a conduit for corruption and other studies that corporate lobbying in the U.S. is primarily about benign industry-information provision to policy-makers. A prior study of Fisman and Miguel (2007) demonstrated how home-country corruption is a robust predictor of variation in corrupt behavior by foreign diplomats in the United States. In this study, using a previously rarely utilized data set on U.S. federal lobbying, we ask whether home-country corruption is a robust predictor of U.S.-style legal corporate lobbying behavior by foreign firms in the United States. We find that, among foreign companies doing U.S.-style legal lobbying with mandated disclosure in the U.S., most lobbying expenditures are carried out by firms originating from the least corrupt countries. We also find that foreign companies originating from the most corrupt countries engaged in far less U.S. lobbying expenditures. We rule out a number of alternative explanations for this puzzling, counter-intuitive set of findings. Overall, the results are consistent with the idea that U.S.-style legal corporate lobbying is relatively more about benign industry-information provision to policy-makers than about nefarious corruption. Other channels still could remain for companies from the most corrupt countries to engage in nefarious corruption in the United States.

Keywords: Corruption, lobbying, institutions