Working Paper: CEPR ID: DP5886
Authors: Nauro F. Campos; Francesco Giovannoni
Abstract: Conventional wisdom suggests that lobbying is the preferred mean for exerting political influence in rich countries and corruption the preferred one in poor countries. Analyses of their joint effects are understandably rare. This paper provides a theoretical framework that focus on the relationship between lobbying and corruption (that is, it investigates under what conditions they are complements or substitutes). The paper also offers novel econometric evidence on lobbying, corruption and influence using data for about 4000 firms in 25 transition countries. Our results show that (a) lobbying and corruption are substitutes, if anything; (b) firm size, age, ownership, per capita GDP and political stability are important determinants of lobby membership; and (c) lobbying seems to be a much more effective instrument for political influence than corruption, even in poorer, less developed countries.
Keywords: corruption; institutions; lobbying; transition
JEL Codes: D72; E23; H26; O17; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Lobbying (D72) | Corruption (D73) |
| Corruption (D73) | Lobby Membership (J50) |
| Firm Size (L25) | Lobby Membership (J50) |
| Foreign Ownership (F23) | Lobby Membership (J50) |
| Political Stability (P26) | Lobby Membership (J50) |
| Lobbying (D72) | Perceived Influence (D91) |
| Corruption (D73) | Perceived Influence (D91) |