Is Lobbying More Effective than Corruption?

Nauro F. Campos in Vox in November 2008 presented the following:

• Lobbying “is a very important alternative instrument of political influence” in transition economies (economies in developing countries).
• The effect of lobbying in producing political influence “is always statistically significant, while that of corruption seldom is.”
• The “size of the effect of lobbying on political influence is always substantially larger than that of corruption (and this is irrespective of whether the ‘target’ is the executive, the legislative, the ministries, or the regulatory agencies).”
• “These findings support the notion that lobbying seems to be a considerably a more effective way for firms to exert political influence than corruption, even in poor, developing countries that are often perceived as highly corrupt.”
• Firms “that favour lobbying tend to be in countries that are politically more stable, more democratic, more likely to be federal states, have a more independent media, and which have experienced more alternations in political leadership”.
• Corruption “is more prevalent in countries where the electoral system does not feature closed lists and has larger electoral districts, where the media is less independent, where the executive has more veto powers, and among smaller and domestically-owned firms.”
• Lobbying “is also a much stronger explanatory factor for firm performance (measured as sales growth) than corruption.”

To read the entire article, click on Corruption happens, lobbying rules.