Lobbying in Brussels. Conflicting incentives (Comparative Politics I. Uc3m)

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This brief paper is a first introduction to those complex dynamics, describing the different incentives, roles and interests of the involved actors in the field of lobbying.
ABSTRACT: In the next three pages I will expose some of the main weak points in the
European decision making process, where there is a lack of regulation, not acheiving a minimun level of transparecy in the relationships between European institutions and lobbies (interest groups). The importance of a stronger regulation over the lobbies will be explained on a rationalchoice theory basis: Even without the aim of becoming corrupt, the members of the institutions are incentivated to benefit the lobby industry thanks to several structural loopholes such as the “revolving doors” problem, the un-balanced experts committees or the lack of human resources in the institutions. Even though the size of the issue is considerable, solutions are quite easy and cheap. Nevertheless, an institution as distant to the average citizen as the EU needs some feedback from society, but not at any price.

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Lobbying in Brussels. Conflicting incentives (Comparative Politics I. Uc3m)

  1. 1. DE C EMB E R 2 0 1 2 LOBBYING IN BRUSSELS Conflicting incentives Jaime Roser Universidad Carlos III de Madrid The European institutions can seem a whole new world for the newcommer MP or European employee. This brief paper is a first introduction to those complex dynamics, describing the different incentives, roles and interests of the involved actors in the field of lobbying. ABSTRACT: In the next three pages I will expose some of the main weak points in the European decision making process, where there is a lack of regulation, not acheiving a minimun level of transparecy in the relationships between European institutions and lobbies (interest groups). The importance of a stronger regulation over the lobbies will be explained on a rational- choice theory basis: Even without the aim of becoming corrupt, the members of the institutions are incentivated to benefit the lobby industry thanks to several structural loopholes such as the “revolving doors” problem, the un-balanced experts committees or the lack of human resources in the institutions. Even though the size of the issue is considerable, solutions are quite easy and cheap. Nevertheless, an institution as distant to the average citizen as the EU needs some feedback from society, but not at any price.Key words: lobbying, lobby industry, lobbies, European Union, European Parliament, EuropeanCommission, Rational choice.Revista Digital: http://www.scoop.it/t/lobbyinginbrusselsLinked-in: http://www.linkedin.com/pub/jaime-roser/48/4b8/168
  2. 2. 1. Introduction There are currently more people working on lobbying the European institutions thanworking in the institutions themselves. This is just an estimate, but in general experts agree that thenumber of lobbyists working in Brussels is around the number of the ones that work in Washingtonover its federal institutions.1 How can our institutions ignore the power of lobbies when for eachEuropean employee there may be two (or twenty) people just thinking on how to influence him? Inorder to get an answer we will have to make a compared analysis of the different involved actors. Slightly known by the citizens, the influence of the lobbies over the European decision-making process is high, and the European institutions know it. Thats the reason of the current(even though slow) developpement of the regulation. The European Commission has instaured avoluntary register of lobbyists and a non compulsory Code of Ethics. This measures have provedthemselves as not enought at all and the European Parliament has proposed a single compulsoryregister for all the European institutions lobbyists (or “representatives of groups of interest”). So thedebate continues as long as a solid and legally stablished solution doesnt arrive to regulate thetransparency of the relationship between the legislator and the surrounding influence groups. The lobbying activities as we know them today began in the secound part of the twentiethcentury in the USA. In the European Union context they have grown proportionally to the increaceof competence given to this institutions. Lobbying is not exclusive of the communitary level.Lobbies can be also found at the national, regional or even local level, but its highest degree ofproffesionalisation can only be found in the biggest level. At first sight, the EU dinamics areconsidered to be as too complicated for a newcomer interest group. The physical distance, thelanguage and legal complexity and the “unwritten” rules and uses of this institutions are the perfectcontext for requiring the services of a proffesional lobbyist. The interest groups influence on the public sector has been studied from many perspectivesbut it continues to be difficult to measure. Some authors (knonw as the “pluralists”) see it as themain link of representation between civil society and goverments besides the electoral processes. 2This vision has been criticed by authors such as Salisbury (1969), who argued that sometimes, evenin contexts of social unrest, interest groups doesnt appear, because they are only created when theindividuals have direct personal benefits perspectives if they join the group. Other authors, closer tothe marxist vision of elites and political influence, have described the lobbying activities as mainlynegative because they are based on an unequall access to the representatives. The definition of whatcan be considered an “interest” and an “influence” has taken many time to the academicians. Wewill just have in mind the controversy around the externalities that lobbies generate for society. Anyway, in a free society lobbying cannot be forbidden, as it is legitimate to speak freely tothe public representatives in order to convince them of what we consider to be the best option.Anyone should be able to do lobbying: private corporations, others institutions and governments,NGOs, social movements and all kind of associations. In theory, anyone oposed to a certain lobbycould use the same instruments in order to try to offset its influence, and that happens very often(heavy metals industry against the enviromentalist NGOs, the interest of a certain country againstthe ones of another, the interests of the producers and those of the consumers,...). But thepossibility of having the same access to the institutions doent mean that all lobbies deppart from thesame level of oppotunities and means. Here lies the start point of the debate: Is it legitimate thateconomical powers have unlimited and uncontrolled access to the decision makers of the Europeaninstitutions? And, if not, how to find and implement a point of balance?1 MOSER, Friedrich y LIETAERT, Matthieu; The Brussels Business: Who Runs the European Union? (Película-documental); 2012.2 MEDINA IBORRA, Iván; ¿Cómo medir la influencia de los grupos de interés? (Propuestas desde el pluralismo, elelitismo y el nuevo institucionalismo); en Working Papers nº279; Institut de Ciències Politiques i Socials; Barcelona;2009
  3. 3. 2. Legal analysis The legal regulation about lobbies around the EU is still based in the principle of self-regulation (what means: no compulsory regulation). This principle, datting from a comunicationfrom 1992 (and kept in the 2008 paper about the subject) 3 is nothing but a handful of goodintentions: the Commission can do nothing but beleiving and trusting the information given bythose lobbyist that want their activity to be registered. If a lobbyist goes against the Code of Ethicshe can be pointed out by a particular or by the institution in which he or she works, but, whateverthe result is, his only possible sanction is to be expelled from the register. In theory the prestige ofhim as a proffesional would be damaged as a result of his actions, but that doesnt mean that he orshe cant continue in the same proffession. The lobby industry is as developped in Europe as in the United States of America, whatchanges is the regulation and the transparency measures that each continent applies to their interestgroups. In the US (Lobbying discoluse act of 1995) jail punishements are envisaged for certainthose who threspass certain limits, and registration is compulsory (Senate office of public records).3. Actors analysis -THE COMMISSION: The main target of lobbies and its current protector. The Commission wants to keep the current self-regulation system. The Commission ishabituated to work with lobbyists and finds them pretty useful. Sometimes the best advice camesfrom those who know a certain field because they work daily on it. The Commission believes thatlobbyists are interested in privileged access to the institution, so they will fulfill the obligations ofthe voluntary register in order to be allowed to have those privileges (such as being warned eachtime a subject of their interest is being discussed and by who). As a whole, the institution has noincentive in helping one particular lobby or another; they are just interested in having as muchcontact with the civil society as possible, specially if they can get high quality technical advices. -THE COMMISSIONERS: The danger of the revolving doors. The European Commission number of employees is quite small if we have in mind thedimension of the European population. They are often overcharged with very technical work, sothey are deppending on external reports in order to create a personal opinion. The commissionersthemselves are in charge of such a wide range of fields that they have no option but to rely on theirpersonal cabinets advices.4 That means that there is a very large number of secound-line peoplewith a lot of real power of influence. One of the biggest problems here are the “revolving doors”:There are the people who works on the regulation of a sector in which they have been workingbefore or in which they expect to be hired in the future. Even if they are not told “change that lawand we will hire you next year for a fortune”, they know that corporations are always grateful to“friends”. As they cannot be removed from their post without a good and serious reason (they arepublic empoyees), they just have to use the very well structured arguments that the lobbies providethem as if they were their owns. -THE PARLIAMENT: The institutional call for transparency and the experts problem. The Paliament calls for more transparency with more structurated rules and a compolsoryregister (as they have said in several reports). But they never arrive to an agreement with theCommission and the Council for an unified compulsory register. As they are the democratic face ofthe EU they have the incentive to be (or at least to seem) transparent and to treat equally to any kindof civil society interest group. -THE PARLIAMENTARIES (MP): Their lack of accountability, means and knowledge. The threat of lossing an election incentivates them in theory to seem transparent and to seekthe best for the general interest. However, the Europeans usually dont have much information aboutwhat their represenatives do in Strasbourg and they tend to vote following their national preferences3 ODDO, Marine; Une nouvelle réglementation des lobbies à Bruxelles; en Revue du Marché commun et de lUnion européenne; nº524; Enero 2009.4 PEDLER, Robin H.; Cómo tratar con Bruselas. El lobby en la Unión Europea; La Caixa; Barcelona; 2001.
  4. 4. no matter what happens at the European level. That means that the MP have subjected toaccountability, but not as much as in the national or regional level. In addition they lack of means even more than the commissioners (that at least have passed apublic competition to get the job) because they may have never herd about the subject they aregoing to vote for (as it is impossible to know about everything). The MPs normally vote following amix of party, national and personal believes. In any case, they are deppending on internal (from theparty) and external experts in order to direct their votes. The problem is that, as it happens in theCommission, the independence of many of this so-called experts can be put under question as theyhave economic and proffesional links with the industries that their “technical” opinion is expectedto affect. This wouldnt be a problem if there was a diversity of oppinions, but sometimes this part-experts doent have any opposition in the committees where they advice. -THE LOBBIES: Their triple action: lobbying, experts and hiring former decision-makers. Lobbyists know perfectly all the mentioned loopholes and they are incentivatd to use themas long as it doesnt cause them any problem or as long as the possible controversies are worth thebenefit. They argue that as long as what thay do is not forbidden by the law it is legitimate. -ALTER-EU (Lobby control NGO): The first line of support for harder regulations. This is the group of interest (involving several national NGOs)5 for the transparency oflobbying activities. They support that the Commission regulations are clearly not enought. Theydemand a compulsory register containing, at least: the name of the lobbyists, who do they represent,who do they contact and when, and the amount of money that they receive and spent in theiractivities. They also claim for a harder incompatibilities regime in order to fight the suspicious“revolving doors” cases that they condemn in their reports.6 They also have a remarcable work onthe questionable independence of some “experts” and the need of a plurality of opinions in certainsof thier committees. This are some of the complaints that they have reported to the Ombudsman.74. Conclusions The lobbies are an important and usefull part of the regulation process. But that help willbe, by deffinition, biased, and only a strong transparency system can guarantee that those advicesdont turn into an uncontrolled power over the public institutions. In general we have to be moderated when we speak about the real degree of power thatlobbies have on the European institutions. Their influence is real and has to be kept in mind whenwe analyze the laws formation process. But their influence shouldnt go beyond a very wellformulated advice. The problem is that some loopholes in the regulation create some perverseincentives for the decision-makers. It is a mistake that shoul and could be fixed. Jaime Roser December 20125 Corporate Europe Observatory; Brussels, The EU quarter; Ed. Sept. 2011.6 ALTER-EU; Bursting the Brussels Bubble; 2010.7 Corporate Europe Observatory, Greenpeace EU Unit, LobbyControl and Spinwatch (Submitted by); Complaint filedto the European Ombudsman against the European Commission, for failing to curb the revolving door through properimplementation of the EU Staff Regulations; 2012.

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