is the lobby register effective?

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Around the world, people perceive lobbying in a negative light 1 2, perhaps unsurprisingly given the abiding controversy surrounding interest groups. They invest heavily in seeking to influence policy. Specifically, they try to induce their government to propose, promote or block policies of regulation, promotion, integration and funding 3. Lobbying is an obscure activity, often criticised for reinforcing a culture of inequality of access to government, and for taking advantage of the disproportionate role of money in politics 4. Critics argue that lobbying produces policy deviation away from the preferences of the public and that it can lead to democracy becoming an oligarchy 5. On the other hand, public officials consider lobbyists as an intellectual subsidy, for which they provide specialist knowledge necessary to work on complex policies 6. Most convincingly, lobbying is a practice not only available to the rich but also necessary to all of society. In order to continue reaping the benefits of lobbying while eschewing the bad, the implementation of a lobby register has been proposed. This remedy has harnessed attention, especially after famous failed experiments with self-regulation. This essay argues that the lobby register is an effective transparency tool for accountability.

Any form of lobby regulation will have to balance between individuals’ right to petition and the democratic value of equality of access. According to Briffault, lobby regulation today is designed to defend the right to lobby while preventing undue influence, to impede one-sided opportunities for influence and to bolster transparency of lobby schemes 7.

There is a multitude of approaches to regulating lobbying. Most countries will ban outright what most consider to be unethical behaviour, such as gifting and bribing, and some will have provisions prohibiting politicians from accepting lobbying jobs right once they leave office. Promises of self-regulation from the lobbying industry are also common, although they have been deemed unrealistic and cause calls for more stringent arrangements 8. Instead, it is the concept of a lobby register that has become popular in recent years, particularly within the European Union 9. Some countries, such as the United States and Canada, have maintained a register since the 1980s 10.

The register is simply a public database containing information about lobbyists; however, there is significant variation in countries’ register implementations. Some countries will have registration requirements for differing institutions; for instance, Germany’s lobby register cover officials in the legislative, but not in the executive branch 11. Registers can also exist at different levels of government, as is the case in Canada and the United States where there are registers at the state and federal level 10. Registers will capture different types of information according to specification, but the key targets are lobbying organisation contact details, interests they have, client details and interest representation spending 12. Some stringent regulatory environments will request lobbyists to further disclose which officials they have held meetings with and the topics discussed 10. The manner they require entries to be updated will also differ; for example, the organisations in the European Transparency Register must update their details at least annually 3. Very few registers are mandatory, as is the case with France 13. Countries will also have distinct procedures for enforcing registration, monitoring updates and validating the contents of the register.

These differences in implementation come from the fact that countries have enacted their transparency regulations for discrete reasons. While the United States legislated for lobby regulation following high profile scandals, Europe initially aimed to facilitate contact between special interest groups and decision-makers; their collaboration is considered by analysts to be crucial in what they think of as a pluralistic democracy 14. In the last decade, the European Union has changed its rationale towards regulating lobby in attaining decision-making legitimacy 15. Furthermore, advocates argue that registers are capable of achieving higher levels of accountability so that voters can punish representatives who not acting in their best interest 1. Therefore, any assessment of lobbying transparency policies must be done concerning the democratic ideals of political accountability and government legitimacy.

In order for politicians to work in the best interest of others, policymakers must embed political accountability within the institutions that select officials 16. An ideal application of accountability will grant the public the means to audit delegated tasks executed by an agent 17, thus effectively allowing citizens to control their representatives 18. Moreover, those institutions which achieve political accountability will display a more comfortable balance of powers as prescribed by Essay 51 of the Federalist Papers: “In framing a government… the great difficulty lies in this: you must first enable the government to control the governed; and in the next place to control itself” 19.

In modern-day democracies, the only tool available to the public for sanctioning their representatives is voting. Accordingly, public officials will avoid deviating from the electorate’s preferences, given that they face a threat of being removed from office. However, the capacity to enforce sanctions is only half of the recipe for accountability and is complemented by answerability which recommends rendering the relevant information available to voters before they can pass any judgement 20.

Decision-making legitimacy is a desirable feature for healthy democracies; it implies that those affected believe that the representative’s decision is “appropriate, proper and just” 21. Political projects with ambitions to grow beyond their original arrangements, such as the European Union, might consider decision-making legitimacy critical. The lack of political legitimacy carries a risk of decreasing citizen confidence in politics, eventually leading to the erosion of democracy 22.

The property which makes most systems deviate from socially optimal outcomes is that of information asymmetry 23. In representative democracies, the information gap gives way to moral hazard in the principal-agent problem of the public and their representatives 16. Voters do not know how officials arrive at policy decisions and when they observe an undesired outcome, decision-makers can still claim they were responsive to information about the state of the world that is inaccessible to the public. In other words, with the corresponding incomplete information, citizens can never be entirely sure that public officials are not shirking their responsibilities. In the case of lobbying, the intent behind mandated information disclosure is to curtail information asymmetry 24.

By utilising Fung and Kosack’s classification of transparency performances, this essay understands lobby regulation as a transparency enabler for one or two targets. The principal purpose of transparency is to enable political accountability, and it involves concessions from the government to be utilised by individual beneficiaries of information. A secondary benefit that citizens can gain from the implementation of a register is transparency for responsible corporate behaviour because it exposes the behaviour of lobbyists and their clients, this depends on local groups to self-organise and exert pressure on institutions 25. Whether it is transparency for accountability, responsible corporate behaviour, or both, will depend on the specified disclosure requirements and the strength of civil society.

Transparency regulation can also be conceptualised as ‘Targeted Transparency’, a particular form of information policy whereby “a more focused approach is used to introduce new scientific evidence of public risks into market choices” 26. This framework allows a better understanding of the lobby register dynamics. Fung, Graham and Weil further specify that in order for a transparency policy to be considered effective, the public has to make use of the disclosed information by embedding it into their decision making 27. All of the ideas conceived by Fung, Graham and Weil, if achieved, contribute to what Fung calls ‘Democratic Transparency’, which gives citizens access to information proportionate to the extent to which organisations jeopardise their interests 28. Accordingly, the principles of Democratic Transparency suggest that information from the lobby register be available, proportionate, accessible and actionable.

Information disclosure, the quality of information and the methods by which it delivers information correspond only to the first part of what Kosack and Fung call the ‘Transparency Action Cycle’ 25. According to this cycle, besides the features described by Democratic Transparency, service providers will respond constructively according to the reactions of citizens after gaining access to relevant information. In the case of lobby regulation, this means that the public can access and understand information about the influence of interest groups in policy outcomes, therefore becoming capable of passing informed judgement about the legitimacy of decisions made. Finally, if there is anything citizens are unhappy with, they will use their accountability capacities to sanction policymakers and inducing behavioural change.

The efficacy of a lobby register hinges on the public successfully keeping public officials accountable. The mechanisms by which they achieve this are two-fold. First, when citizens use their vote to re-elect or remove politicians for office, it is called vertical accountability, and it is the most straightforward. In this scenario, the voters use a choice mechanism to maintain their representatives accountable. However, it also means that the efficacy of the policy will depend on other factors such as whether the incumbent desires to be re-elected, if no decent alternatives are running for office or if other issues are more salient to the voters. Second, the alternative is societal accountability by which the population’s voice mechanism is activated. The public can target this mechanism on private actors, and it depends on a capable civil society that will mobilise and exert pressure on the government by protesting, petitioning or even lobbying. However, tactical approaches should be careful not to assume that there are no costs in exercising this option and that the public’s collective action will have enough leverage to influence their public officials 29.

Having specified all the requirements for lobby registers to be effective, a robust design can be assembled. The public should be able to know who is trying to influence whom, and on what issues. Therefore, the register should include details about the lobbying organisation and with whom they are meeting. This should be updated regularly. As corruption is often uncovered by merely following the money, lobbyists groups should declare how much they are spending to influence activity and who their clients are 9. As with campaign finance some interest groups will hide behind shell organisations so their contribution cannot be traced back to them 7; therefore, the register must compel registries to reveal the organisations that created or funds them.

Public officials should maintain open calendars so that citizens can tell whether they are equitable with their time 1. The reports must be electronic and available to the public on the internet in downloadable format. The implementation of a database is favourable since it will allow searches, analysis and graphics.

The regulation must have a clear and well-scoped definition of lobbying activity. Without this, someone will try to evade disclosure and contend that they and their activities are not included in the law. Lawyers, for example, will try to claim the right to confidentiality even though their work is not of a legal nature 30. The requirements should involve all type of lobbyists, both contracted and in-house.

Registration and the quality of information must be enforced by an independent governmental agency. In order to minimise the risk that it would be shut down, it should not rely on funding from public officials. Holman and Luneburg suggest that this agency should charge fees from registrants and their clients 9. The downside to this would be that should fees be high, then small lobbyists would not be able to register, thus further aggravating the inequality of access 31. Perhaps those who declare spending below a certain amount could be exempt. Such an agency should revise the information submitted to the register in order to avoid cases such as the one of the European Chemical Industry Trade Association, who declared a lobbying spending of only €50,000 despite being one of the largest lobbyists in Brussels 30. Another entry in the European Transparency Register claimed an annual spend of 250 million euros, later attributed to a prank 12.

Registers must be mandatory. The voluntary lobby register in the European Union only registered 22.8% of an estimated 2600 lobbying organisations, even though the European Parliament restricts physical access to those who feature on the list. Implementing a rigorous register can be considered onerous by many, but the Canadian example has shown that this is not necessarily the case 32.

The register must be in a regulatory environment of transparency. A legislative footprint, where legislators can mention those who have participated in passing a bill, and robust Freedom of Information laws can reduce the required effort in investigations for civic society and the press, who must be active and self-preserving given that they play an essential role in sustaining societal accountability as mentioned above. Individuals will struggle to assimilate information due to cognitive costs or behavioural patterns 28. Therefore, civil society must help simplify and promote the findings of the register.

Finally, the OECD Transparency and Integrity in Lobbying report suggests that countries should go beyond prescription and enforcement as transparency is a virtue that can be embedded within the social culture. Thus, such standards of professionalism must continue to be promoted within institutions 1. A Code of Ethics can contribute to such a mission, especially if those that promise to abide by them are punished when they misbehave.

Because of the lack of evidence, the effectiveness of the ‘ideal register’ discussed above cannot yet be proven empirically. As of 2014, there were only 20 political systems in the world with any type of lobbying rules. Within this group and the countries that joined them during the last few years, there are no successful implementations of the ideal register 2. This does not mean that no country has been effective in curbing inequality of access or improving decision-making legitimacy with their rules; however, it means that even those that do will display some weaknesses.

Research has shown that lobbying regulations in the United States have altered public policy positively and nurtured an environment of openness and professionalism in government 33. However, like Canada, they still lack an independent body with powers to sanction register violators, relying on other government officials to prosecute 10. The Canadian register does not even require reporting the amount of money spent on lobbying activities 9.

In 2012 after an embarrassing episode of corruption in the European Parliament, countries like Austria and Slovenia have rolled out aggressive transparency regulations and established independent governmental organisations with prosecuting powers 9. Unfortunately, the Slovenian register did not include spending and had little political support, leading to weak enforcement 34. The Austrian register regulates contract and in-house lobbyists, but interest representatives of NGOs and professional associations have managed to remove themselves from register requirements 35.

Bunea argues that the European Transparency Register did not successfully close the information gap. This is expected given that their register was voluntary. However, it is also possible that the policy was unable to design useful information for the target audience, given that the European Union includes citizens of 27 different political systems 36. Such complexity could dilute the mechanisms that help the public stay informed and help activate their accountability capacities, as prescribed by Fung and Kosack’s Action Cycle.

It is possible that some bodies of the European Union, such as the European Commission, tolerate weak lobby regulations given that the public does not elect their officials. The lack of electoral procedures implies that, given that decision-makers do not necessitate campaign funding, interest groups have little capacity to mount pressure on them. The lack of incentives to regulate in this case goes to show that the political system will provide the reasoning and motivation for regulation. Regulators may feel that a voluntary register is enough to improve the perception of legitimacy, even when there is no real change in accountability as it would have certainly been the case with a mandatory register.

Assuming that a country implements the ideal register with adequate complementary regulations in place and a reliable, independent agency monitors and enforces compliance, then the threat of punishment will be real enough for policymakers to offer equality of access to every petitioning group. However, this does not imply perfect representation; politicians can still choose to deviate. After all, voters do not have incentives to punish those who deviate but make them better off 16. However, this is a fault of representative systems and not an issue that a transparency policy will solve.

Societal accountability is enhanced only when there is a qualified civil society that will subsidise the costs of using one’s voice. An open transparency register can facilitate investigations into interest groups and their collaborators in office. Therefore, any breach of the Code of Conduct, or practice of revolving doors, is more likely to be discovered after the fact. If punishment is severe, then officials will be encouraged to minimise their exposure to lobbying pressure. For this, a strong and independent press that will publicise scandals is necessary.

Legitimacy is a precarious concept because it only requires convincing people that a due democratic process is being conducted rather than conducting one. It has been shown that a lobby register could only be a tactic from politicians to gloss over their defects. Observers should be wary of deceitful registers but should not disapprove the achieved effectiveness for decision-making legitimacy when a register is promoted with the best intentions. Contrasting the contended increase in legitimacy of a register with its improvements in accountability will give an idea of whether this is deserved legitimacy.

The clearest coup of a well-implemented register is against legislative inertia. If the floor is spending too much time discussing matters of little relevance to the public, an informative register will potentially signal the interest groups that are flooding the agenda. Politicians will not be able to defend the sustainment of an unrepresentative debate.

After performing a review of registers, their motivations for achieving transparency, their methods in achieving political accountability and decision-making legitimacy, their design requirements and their shortcomings, this essay has shown that the effectiveness of registers are limited and highly conditional. Some will say that the tendency for people to form coalitions and trade favours is natural and that there will always be unfair links between those inside government and those outside 37. While this sentiment might be accurate, one would do well to recall Robert Dahl’s thought: “no state has ever been fully democratic, but the expectation provides high standards and guidelines” 38.

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