Lobbying and Corruption Dr James Tremewan - PowerPoint PPT Presentation

Lobbying and Corruption Dr James Tremewan (james.tremewan@univie.ac.at) Lobbying in Brussels / The Tullock Model

Lobbying in Brussels 2/27

Lobbying in Brussels Lobbyists in Brussels: who are they? 1 • Precise data is hard to come by, but estimated: • 15,000-30,000 actively employed to influence EU institutions. • Two-thirds work for business interests (the rest for civil society and trade unions). • Corporate lobbying well in excess of one billion euros. • In-house lobbyists: • 500 corporations have their own lobbying offices: BP, Rolls Royce, E.ON... • 1,500 industry lobby groups: International Association of Amusement Parks and Attractions, European Chemical Industry Council (over 170 employees representing 29,000 companies)... • NGOs: Amnesty International, The Smoke Free Partership, Transgender Europe... • For-hire firms: Think tanks; Public relations and law firms. 1 http://corporateeurope.org/sites/default/files/publications/ceolobbylow.pdf 3/27

Lobbying in Brussels Lobbyists in Brussels: what do they do? • Work in advisory groups (Set up by EC in early stages of legislation development and policy initiatives to provide technical advice). • Draft amendments to legislation (sometimes used as is by MEPs). • Cultivate informal relations with MEPs: cocktail receptions, expenses-paid trips, dinners. 4/27

Lobbying in Brussels Lobbyists in Brussels: problems and safeguards • Fine line between gifts and bribes, lobbying and corruption. • Cash-for-influence scandal: • Sting operation by the Sunday Times in March 2011. • 60 MEPs invited to assist fake lobby firm for 100,000 per year. • 14 agreed to meet, and three appeared to accept: Ernst Strasser (Austria), Zoran Strasser (Slovenia) resigned; Adrian Severin (Romania) did not. • Transparency of lobbyists: • Register of lobbyists 2 including who they work for and how much they spend. • Currently voluntary, but plans to make it compulsory by 2017. • Transparency of officials: • European Commissioners and MEPs must declare financial information. • But no evidence this is systematically verified 3 . 2 ec.europa.eu/transparencyregister 3 www.transparencyinternational.eu/focus areas/eu-integrity-study 5/27

Lobbying for rents Lobbying: what is it all for? • As we have seen, a huge quantity of resources is put into lobbying EU institutions (the same goes for national institutions all around the world... Washington has an even higher density of lobbyists.) • NGOs may highlight environmental problems, human rights causes, etc. • Much industrial lobbying is about obtaining or defending economic rent: • ”The big industrialists grumble that the politicians don’t give them enough protective tariffs, and the politicians grumble about industry for not coming up with enough money for their election campaigns.” Count Leinsdorf in The Man Without Qualities by Robert Musil. 6/27

Lobbying for rents Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MC+tariff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Quantity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Q tariff Q MC • International firms and domestic monopoly produce at cost MC . • With no tariff: production at Q MC , total surplus = A + B + C. • With tariff: production at Q tariff , total surplus = A + B. • B is just transfer from consumers to domestic monopoly, so welfare loss of tariff to country = C (?) 7/27