Policy uncertainty and demand for revolving-door lobbyists
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Policy uncertainty and demand for revolving‑door lobbyists Huchen Liu1 Published online: 26 September 2020 © Springer Nature Limited 2020
Abstract Interest groups spend large sums of money hiring lobbyists often as a form of insurance against the risk of undesirable policy change. This theory of lobbying as political insurance needs systematic testing. Previous experience serving in government makes lobbyists more valuable as providers of political insurance. The insurance theory of lobbying thus points to an empirical link between policy uncertainty and interest groups’ demand for these “revolving-door lobbyists” with previous government experience. I examine this link using complementary sets of panel analysis of lobbying activity by companies in four economic sectors over an 11-year period. They draw on a sector-specific and time-variant measure of policy uncertainty based on analyzing companies’ discussions of policy risks in annual 10-K filings submitted to the US Securities and Exchange Commission. In all four sectors companies’ preference for revolvers increases in response to policy uncertainty relative to conventional lobbyists. Keywords Lobbying · Revolving door · Policy uncertainty · Interest groups · Business and politics
Introduction A primary set of theories of lobbying conceptualizes it as the transfer of information from interest groups to government officials (Lohmann 1995; Austen-Smith 1995). In these models of lobbying, officials lack sufficient technical policyrelevant information to make policy, so they rely on informational input from Electronic supplementary material The online version of this article (https://doi.org/10.1057/s4130 9-020-00104-x) contains supplementary material, which is available to authorized users. * Huchen Liu [email protected] 1
Department of Political Science, University of California, San Diego, Social Sciences Building 301, 9500 Gilman Drive #0521, La Jolla, CA 92093‑0521, USA Vol:.(1234567890)
Policy uncertainty and demand for revolving‑door lobbyists
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expertise-rich interest groups, often in the form of “legislative subsidy” (Hall and Deardorff 2006). Another body of research proceeds from analyzing interest groups’ objectives, constraints facing collective action, and available strategies. This literature finds that interest groups, particular for-profit companies, often lobby to prevent harmful policy change rather than persuade the government to enact change. Playing defense is more universal, while playing offense is more of a luxury available only to the most resource-rich organizations (Drutman 2015a, b; Baumgartner et al. 2009). In their recent book, LaPira and Thomas (2017) explicitly model lobbying as a set of interest group actions to insure against the risks of policy change. Lobbying as political insurance does not inherently preclude conceptualizing it as informational transfer. Although interest groups’ supply of policy-relevant information to officials intuitively comports best with lobbying as playing offense, groups can certainly tr
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