Lobbying, Corruption and Political Influence

        with Francesco Giovannoni

        Published in Public Choice 131 (1): 1-21, March 2007 (volume lead article)             ( PDF )

        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.

        Download working paper:         IZA DP 3087         CEPR DP 5886

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