GLOBAL EFFECTS OF DOMESTIC AND FOREIGN LOBBYING
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Abstract
Though lobbying is seen as a staple in American democracy and the law making
process, there is overwhelming evidence that lobbying is in fact not democratic at all. The
purpose of this research is to expose the un-democratic tactics that lobbyists use to further
corporate interest, not public interest. This Analysis aims at uncovering the corruption
behind lobbying both in and outside the United States and show how truly unjust it is.
Not only does this paper aim to uncover unjust lobbying, it’s also an attempt to explain
how American lobbying has an effect on global economies and foreign affairs. The
influence of American lobbying on a global scale is alarming and should be considered
when analyzing American influence in foreign countries. Extensive analysis on foreign
trade policies and resource privatization influenced by lobbying is used to support the
claim that lobbying is used to control foreign affairs and profit multinational businesses.
This research also presents the argument backed by political researchers that lobbying is
not as influential as previously claimed through analysis of quantitative data, however
empirical analysis of corporations’ return of investment from lobbying shows otherwise.
In conclusion, this research intends to show the negative repercussions of lobbying on a
global scale and how it only benefits the healthy, not the public.
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Lobbying is engrained in American political history and is accepted as part of the
law-making process. Lobbying is also found in other parts of the World, from England to
Lithuania, to even a handful of Latin American countries such as Ecuador and Bolivia
(though not as influential or regulated as American lobbying is). What many don’t know
is that even domestic forms of lobbying has the power to change foreign relations and
reshape the global economy, not just implement policy change within the lobbying
country. Corporations have the financial advantage to gain an upper hand on policy
changes geared towards their interest through lobbying methods that can change
economies all over the world. Some argue that lobbying’s influential power on law and
policy are not just fueled by funding but involve other factors. However, this essay is an
attempt to show that money is in fact one of the most influential factors that go into
successful lobbying. As a result, lobbying is not made to gear toward public interests
even when NGOs use it as a political tactic. In the end, direct action is needed when
change is necessary.
The three countries that use lobbying the most as a means of law making and
policy reform is the United States, England, and Australia (with other countries in the EU
that use lobbying but is not as influential). Lobbying is a political tactic to gain influence
over official decision-makers and various government representatives in order to push a
particular interest group or corporation’s agenda through political and social
“networking”. This “networking” can range from a lobbyist buying a round of golf for a
legislator in order to talk about an up coming bill, to a union representative offering
endorsement and campaign money to a representative if a certain policy is changed. In
this context, international corporations spend an unbelievable amount of money in order
GLOBAL EFFECTS OF DOMESTIC AND FOREIGN LOBBYING
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to gain more profits. How successful is this tactic? Lets take a look at the numbers: oil
companies invested $347 million in campaign donations and lobbying that ultimately
lead to government subsidies of fossil fuel companies that led to a profit of $20 billion
(that’s $59 profited for every $1 spent towards lobbying, a 5,900% return on investment),
US corporations through the US Chamber of Commerce invested $283 million on
lobbying for tax breaks in order to bring offshore profits back to American banks which
led them to pay $63 billion less on taxes ( that’s $220 saved for every $1 spent, or
22,000% return on investment), and the pharmaceutical industry invested $116 million
lobbying to keep federal health care like Medicare and Medicaid from haggling with
cheaper competitive drug companies, keeping drug prices high and making a profit of
$90 billion a year as a result (that’s $775 earned for every $1 spent, or 77,500% return on
investment)(Alexander et al., 2009). This kind of influence is seen in all types of
multinational corporations in order to keep profits up. As Susan George states on her
analysis of the agribusiness and the advent of the Green Revolution, corporations exerted
their financial might to influence policy makers to subsidize High Yield Varity crop
growers and corporations, and even went so far as to patent the seeds themselves
(George, 1989). These policies had negative effects not just on small farm owners in the
US, but in countries all over the world including Mexico and India. Unfortunately, the
agribusiness’ control on HYV crops is only one of many examples of American lobbying
having global effects on the economy.
American lobbying in Washington DC goes beyond the jurisdiction of the United
States and is a way of exerting power and push agendas on foreign countries. In Heindl’s
(2012) analysis of diaspora groups’ influence on American foreign affairs, he states “Not
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surprisingly, groups with deep pockets like the American Ireland Fund, the Cuban
American National Foundation and the Anti-Defamation League frequently lobbied US,
homeland and foreign governments, and used a generally broader array of tactics, than
those with medium or small budgets…this reinforces the popular notion that lobbying
governments is an expensive proposition that many NGOs simply cannot afford to do on
a regular basis” (pg. 478). Not only does this reiterate the notion that affluent interest
groups have the most power in terms of lobbying techniques, but it also sheds light on the
fact that affluent groups of any nation or country can have this fiscal power over law
making to push their own agenda (i.e. the Cuban American National Foundation pushing
to lift all Cuban Embargos, or the American Jewish Congress influencing the Department
of Defense to increase military spending for Israel). These changes in foreign policy are
implemented by domestic companies and through organizations like the World Trade
Organization. As stated in Victor Menotti’s (2006) analysis of WTO regulation,
multinational businesses lobby and network within the WTO in order to create trade
regulations that disenfranchise local populations in order to create more profit for the
corporations (pg. 67). This is not just an example of lobbying that effects foreign
countries, but an example of how lobbying directly goes against the interests and civil
rights of a foreign nation’s population. A more concrete example of WTO lobbying going
against national interests is tobacco companies lobbying to enforce regulation on
cigarette imports to Thailand under WTO agreements. In McKenzie and Collin’s (2012)
study on the WTO’s influence in cigarette imports in Thailand, they explain how “the
United States Cigarette Export Association’s specific remit was to lobby the US
government for elimination of regional restrictions on imported tobacco products, and to
GLOBAL EFFECTS OF DOMESTIC AND FOREIGN LOBBYING
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insulate US manufacturers from domestic advertising bans and other tobacco control
regulations once market access was achieved… Association lobbyists also claimed that
access to markets in Southeast Asia would generate considerable income and lead to
domestic job creation” (pg. 151). This reform on Thailand’s import policy on tobacco
sales put almost every Thai tobacco farmer out of business because they were competing
with WTO-backed American cigarette companies. Not only did these policy reforms go
against the need and want of the people of Thailand and their economy, but also went
against the advice of health advocates, such as the World Health Organization, that
domestic exports of cigarettes to Thailand would increase smoking habits in the nation
and cause increased health risks (McKenzie & Collin, 2012, pg. 155). From Thailand to
Israel, these cases show that American lobbying is proven to be influential in foreign
policy making.
Many political scientists and researchers would argue that the success rate of
lobbying is not dependent on the amount of money spent, some even argue that lobbying
is not as influential as most make it out to be. In McKay’s (2012) research on lobbying
success in America, he claims “financial resources are not predictive of actual success in
the policymaking process. Members of Congress will not keep their jobs if their
constituents are dissatisfied, no matter how many campaign dollars interest groups give
them nor how much time they spend with lobbyists… evidence suggests that some traits
specific to the lobbyist, to the organization, and to the issue are associated with both
greater organizational wealth and greater success.” (pg. 910). Although this research
suggests that its not the amount of money funded for lobbying but the tactics of the
lobbyists that make favorable policy changes, one can argue that wealthier
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businesses (ie. global corporations) can afford to hire that best and most influential
lobbyists money can buy which in turn makes them more successful. In Bernhagen’s
(2012) research on lobbying in British Parliament, he claims that “organized
interests rarely succeed in interfering with the promulgated plans of democratically
elected policy makers… in only a small number of cases can lobbyists successfully
persuade policy makers to take a course of action that is beneficial to the lobbyist
while contravening the declared policy goals of a democratically mandated policy
maker” (pg. 36). This research proposes that lobbyist have incentives to keep their
jobs and represent the interests of the people, not matter what country they
represent (America, England, or others). However, there has been plenty of
instances where policy changes were made against citizens’ wishes. Take for
example the recent proposal for a change in education policy: California legislators
voted down a bill that would make firing teachers who committed crimes related to
sex, drugs, or violence against students easier. This bill was written after a California
teacher was accused of sexual assaulting his students and was given $40,000 to
resign verses the yearlong process required to actually fire him. The majority of
those who choose not to vote, which led to the bill’s down fall, were representatives
that received campaign money from the American Federation of Teachers.
In non-American policy and law making reforms, lobbying can be used by
grassroots campaigns to bring the voice back to the people. In the US there are
leaders for Social Justice like the Human Rights Campaign that lobbies for gay rights,
but in Ecuador political tactics such as lobbying was used to de-privatize water.
Hoogesteger’s (2012) research on the Interjuntas-Chimborazo Water Federation’s
GLOBAL EFFECTS OF DOMESTIC AND FOREIGN LOBBYING
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regulation on water in Ecuador highlights the effectiveness (or lack thereof) of
lobbying to keep public interests in mind. In his research, Hoogesteger explains how
“the Legal Advisory Office established a dossier to document the injustices and
problems that water users experienced. With the dossier, Interjuntas-Chimborazo
started a lobbying process at provincial and national levels to replace the director of
the [national] Water Agency. For this, a legal process was started… but the process
stopped and the head of the WA office reinstalled”(pg 82). Because of the lack of
funding that the Interjuntas-Chimborazo council had, their lobbying efforts went
unnoticed, as a result, “On June 27 a massive mobilization of more than 4,000 water
users was organized in the city of Riobamba. The mobilization ended with an 18 day
occupation of the WA office. The water users remained in the offices until their
demands were heard and several agreements reached. The agreements included the
dismissal of the head and the secretary of the WA office and the establishment of a
transparent, open public procedure to establish a new director. This procedure was
carefully supervised by Interjuntas-Chimborazo. In January 2006, a new director
was chosen and the WA office became more transparent and just77” (Hoogesteger,
2012, pg. 83). This case study shows that lobbying is only successful for affluent
interest groups, making lobbying virtually useless for NGO interests groups, like that
of the Interjuntas-Chimborazo federation in Ecuador. This is not just a lobbying
problem in Latin America but in the United States as well. Social Justice Groups like
the Human Rights Campaign mentioned before invest only a fraction into lobbying
compared to what multinationals invest. As a result it is overwhelming apparent
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that the more money you have towards funding lobbyists the more successful you
are in implementing policy changes that benefit your interests.
So what about interest groups that don’t have this funding? What about
grassroots organizations that fight against the social inequalities that result from
corporate lobbying? Just like we saw in the case study in Ecuador, lobbying just
wasn’t enough. Protesting and direct action was truly needed in order to push the
interest of the common people, or in other words, protesting in large numbers truly
shows the legitimacy of an organization, not the amount of money you can invest in
lobbying. Though there is hope for disenfranchised people through protesting and
direct action, NGO’s are still the Davids against Big Business Goliaths, but
unfortunately rocks have been privatized and slings are too expensive.
GLOBAL EFFECTS OF DOMESTIC AND FOREIGN LOBBYING
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Sources Cited
Alexander, R., Mazza, S. W., & Scholz, S. (2009). Measuring rates of return for lobbying
expenditures: an empirical analysis under the American Jobs Creation
Act. Unpublished working paper. University of Kansas.
George, S. (1989).Chapter 5: The Green Revolution, How the Other Half Dies (pages 88107). Hamondsworth: Penguin Books.
Heindl, B. S. (2012). Transnational activism in ethnic diasporas: Insights from cuban
exiles, american jews and irish americans.Journal of Ethnic and Migration
Studies, 39(3), 463-482.
Mander, J. (2006) Menotti, Chapter 7: How the World Trade Organization Diminishes
Native Sovereignty. Paradigm wars: Indigenous peoples' resistance to
globalization (pages 59 – 68) . Sierra Club Books.
MacKenzie, R., & Collin, J. (2012). ‘Trade policy, not morals or health policy’: The US
Trade Representative, tobacco companies and market liberalization in
Thailand. Global Social Policy, 12(2), 149-172.
McKay, A. (2012). Buying policy? The effects of lobbyists' resources on their policy
Success. Political Research Quarterly, 65(4), 908-923.
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Bernhagen, P. (2012). When do politicians listen to lobbyists (and who benefits when
they do)? European Journal of Political Research, 52(1), 20-43.
Hoogesteger, J. (2012). Democratizing water governance from the grassroots: The
development of interjuntas-chimborazo in the ecuadorian andes. Human
Organization, 71(1), 76-86.