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The theory of lobbying in government

Lobbying is progressively more visible in the recent years and powerful characteristic of every political system throughout the world, accomplished by many skillful professionals. Lobbying is a colossal industry consisting of wide variety of professionals including Lawyers, Ex-politicians, Government officials and many highly influential people. Lobbyists can have competitors like public associations, research organizations, companies and its trade unions. Public constitutes the main factor of contingency in successful lobbying. Political decisions are made considering the welfare of the public and the public can be categorized into two channels for lobbying. direct channel which deals with the political policy makers and elected officials. Indirect channel constitutes media and the community.(Jaatinen, 1995).

LOBBYING FOR GOOD

Lobbying can also be done for good deeds. Many corporate are involving lobbying to promote social welfare either as corporate social responsibility or to be in good books with the public. It can satisfy any of these three objectives, namely Generic social issues, Value chain social impacts and Social dimensions of competitive context. The best quintessential for lobbying on general social issues is the campaign for Violence against Women Act by Mary Kay. With her persuasive expertise in influencing Government officials, she leveraged her company’s reputation and also appealed for change in amendments in the legislature to enhance research on breast cancer and include insurance coverage for mammograms. Even though lobbying for general issues is not aligned to the business goals it may be rewarding for the company in terms of employee benefits and increased fame for the firm. (Peterson & Pfitzer, Winter 2009)

It is a common notion that companies steering Government are profit seekers and socially responsible lobbying is done mostly by the non-profit organizations. But corporate companies also address social problems and lobby for changes in federal laws. NGO together with corporate partners are streaming into the administration assembly to impact favorable changes for the society. But even organizations with good CSR records and practices, sometimes conflict their social responsible image when stringent rules are imposed, leading to lobbying. We can quote the example of Toyota, an automobile giant in the world gathered lobbyists in order to moderate robust fuel economy standards. Meanwhile, Toyota also manufactures Pirius, eco-friendly cars for the cause of good environmental factors.

WHEN LOBBYING BACKFIRES

Backfires also happens in lobbying. This occurs when a conflict arises between the lobbyist and the Government or public or even the media. We can quote the example of the Norwegian Oil Industry which needed tax amendments and demanded incentives to enhance oil exploration on the Norwegian Continental Shelf. The campaign created a furor among the journalists and the Government. The lobbyist should tackle the problem from a stakeholders view. Had the lobbyist inculcated insights from the stakeholder theory, this backfire could have been reverted. Lobbyist should rally the media people and public opinion to make an effective “climate change” before lobbying. (Ihlen & Berntzen, Vol. 11 No. 3, 2007)

LITERATURE REVIEW

Many scholars and political academician have considered lobbying as both communal and political phenomenon ( (Austen-Smith, 1994), (Kollman, 1998). Lobbying strategies implemented by various lobbyists can also be studied. Lobbyists commence influencing politicians by establishing direct contact with them for formulating the policies in favor of them. Media relations are also one of the strategies adopted by lobbyists in addition to coalition building.( Kollman, 199), ( Uhrwing, 2001). Effective characteristics can also be obtained from the works of (Haug, 1997) (Mack, 2005). Good listener, observant, politically savvy are some of the most remarkable traits possessed by a good lobbyists. Maria Jaatinen has conducted the research on lobbying based on public relationsand James E.Grunig proposed the lobbying theory based on building symmetrical relations with its environment. (Grunig, 2001)

LOBBYING IN U.S.

The number of lobbyist-client relationships in US shoots up every year. Company with an interest in lobbying on its own behalf as well as lobbying firms grew faster in US. Pharmaceuticals and health sectors, insurance industry are the biggest industries in the lobbying game next to Tobacco industry. Oil, Gas and power, mining, airline sectors are hotbeds of extreme lobbying.

Even though lobbying is legitimate in U.S., many contradictions regarding lobbying occurs between those organizations which requests more stringent restrictions on lobbying and those who encourage lobbying activity. ‘Ethics reform bill’ constituted a provision for encouragement in ‘grassroots lobbying’. Public can do lobbying for changing amendments in the federal law, provided it is a worth considering issue. On the other hand ‘Executive Branch reform Act’ has a controversial view to the grassroot lobbying.

Health sector saw a plummeting lobbying expenditure when a sudden shift in soaring health spending was observed. This reflected in Congress paying more attention to a patients’ bill of rights. Various medications copyrights were soon to expire and they required extension. Many pharmaceutical firms approached lobbying method for stretching the patents life. Schering-Plough spent nearly $9.2 million to lengthen the allergy drug Claritin’s patent life.

FUNDING FOR LOBBYING

Lobbyists gain political access by contributing huge amounts for campaign process. Since lobbyists depend on the politicians, it is a pre-requisite for them to have strong network of politician or be politically savvy. Campaign contributions are the apt choice for influencing the elected or to be elected officials. But recent change in Congress ethical law’s in 2007 made it mandatory for the organizations to disclose their contributions for the campaign.

Changes in the Cabinet’s legislature takes place when a new Government is formed or any political functionality is reviewed or needed to be regulated. Lobbying expenditure is seen to vary proportional to those changes. Lobbying effort is pursued mostly by those industries which are under the discussion and that particular industry either seeks to do lobbying through the lobbying firm or tries to influence the Government by its own team of influential intellects.

For example, there was a rise in lobbying expenditure, about $50 million by the tobacco company during 1997-98. These highlights to the fact that the Congress was attempting to penalize the tobacco industry as an effort for refining the legislature. The cigarette manufacturers demurred and the lobbying campaign became too intense. They indulged in heavy lobbying expenditure however with dwindling sway in federal tobacco legislation; less expenditure on lobbying was reported in 1999

The graph shows the total lobbying expenditure and the number of lobbyists in U.S. for a decade .

Total Lobbying Spending

1998

$1.44 Billion

1999

$1.44 Billion

2000

$1.56 Billion

2001

$1.64 Billion

2002

$1.81 Billion

2003

$2.04 Billion

2004

$2.17 Billion

2005

$2.43 Billion

2006

$2.62 Billion

2007

$2.86 Billion

2008

$3.30 Billion

2009

$3.46 Billion

Significant increase in number of lobbyist is seen in U.S. More corporate are seeking the help of lobbyists and hence rapid lobbying firms were also established within a decade.

Sector

2008

2009

Difference

Pct Change

Health

$485,176,241

$538,141,709

$52,965,468

10.9%

Energy HYPERLINK "http://www.opensecrets.org/lobby/indus.php?year=2009&lname=E"&HYPERLINK "http://www.opensecrets.org/lobby/indus.php?year=2009&lname=E"Natural Resources

$387,682,729

$408,518,506

$20,835,777

5.4%

Finance, Insurance HYPERLINK "http://www.opensecrets.org/lobby/indus.php?year=2009&lname=F"&HYPERLINK "http://www.opensecrets.org/lobby/indus.php?year=2009&lname=F"Real Estate

$449,831,789

$455,414,072

$5,582,283

1.2%

Labor

$40,424,506

$43,381,295

$2,956,789

7.3%

Construction

$58,169,634

$56,672,414

$-1,497,220

-2.6%

Transportation

$253,721,460

$243,261,558

$-10,459,902

-4.1%

Defense

$150,804,423

$135,879,762

$-14,924,661

-9.9%

Communications/Electronics

$376,727,783

$360,076,325

$-16,651,458

-4.4%

NOTE: Figures are on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on February 01, 2010.

(Retrieved from http://www.opensecrets.org/lobby/index.php and http://lobbyingdisclosure.house.gov/)

This table shows various sectors expenditure for the past two years in U.S.

LOBBYING IN INDIA

In India, the entire business of influencing and pressurizing the Government decision makers was considered to be ambiguous as well as deliberately indecorous. Public view Lobbying in a derogatory sense because they believe that lobbying benefits only the powerful and well resourced groups and of less social and economic interests and hence lobbying is more prone to criticism from both the journalists and academician. Until recently, exerting influence over policy makers involved squandering suitcases with money but now with increase in transparency and vigorous involvement of media, lobbying is nascent in India. Religion and caste played a vital role in Indian politics and policy makers also relied on those factors for decision making. Currently tradition aspect is waning and more emphasis lay on captivating the Government with a business proposition that promises benefit for the customer and the country. Thus lobbying industry in India is no longer considered to be disrepute.

Indian lobbyist chamber comprises of many retired bureaucrats, ex-politicians, lawyers and officials from commerce and communications sector. Dilip Cherian co-founder and consulting partner of Perfect Relations, V.Balasubramanian,Shankar Adawal and AN Sethuraman of Reliance group, Niira Radia of Neosis, Suhel Seth popularly known as the Facebook boy of Indian Lobbying are some of the budding influence wielders. (Ray, 2009)

Lobbying is also done by multi-national companies in India. For example, European packing company Tetra Pack resorted to lobbying when it required duty cuts in importing the raw materials. Dilip Cherian targeted the milk sellers’ poor socio economic condition. He prompted them to request their MP to bring down the duty rates as the cartons were costlier. Simultaneously Dilip made effective representations to the Indian Government and made them to relent on the import duties. (Ray, 2009)

RECENT INCLINATION TOWARDS LOBBYING

Direct Government –Government handling through lobbying is happening now in India along with corporate sectors coercing the policy makers by offering considerate proposal. According to lobbying records filed with the Department of Justice, Indian Government tied up with BGR, well acclaimed lobbying firm in 2005 to persuade US Cabinet on the diplomatic mission of sending an envoy to Pakistan and India regarding Kashmir issue. With lobbying efforts of Andrew Parasiliti, former U.S. State Department counter proliferation official, Stephen Rademaker, BGR partner Ed Rogrs and Former U.S. Ambassador to India, Robert Blackwill, India succeded in deliberately not including its’s name in the official Terms Of References of Holbrooke’s mandate. The reason behind lobbying is to make sure that India is not grouped with Pakistan and Afghanistan as the trouble maker on nuclear issues in Kashmir.

Lobbying raises chaos among the environmentalists, when the corporate sector influences the Government to protect its interest than to protect the environment. This has occurred many times in India, inviting the media to nose in and project an ominous picture of lobbying practices.

The introduction of using higher grade fuels, Euro III which has less Sulphur and Benzene emission, in order to reduce pollution in the environment was a welcoming oasis to the environmentalists. Environmental regulators directed the oil ministry to implement switching to Euro III on a state wise schedule. Meanwhile, switching from Euro II to Euro III within a stipulated time is highly impossible and oil companies are lobbying to postpone the deadline. And the decision now lies in the hands of the Government.

COMPARISON OF LOBBYING IN U.S. AND INDIA

Lobbying Act ensures degree of candidness to some extent in U.S. Corporate can reveal their perambulation around the Cabinet or even Pentagon. But in India accountability to lobbying and the lobbying expenditure is not conveyed properly. Interference of the Government on corporate responsibility norms is not encouraged by the corporate sectors. It shows the juvenile nature of the corporate. India promises only on self-regulation and is not contend with bringing lobbying into legislation.

However, Indian companies going global should comply with the international lobbying legislations. Failure to act in accordance with the Lobbying act can fetch a penalty of $100,000 and imprisonment for 5 years. Even private sectors depend on Government’s discretionary powers like sanctioning the loans or license faster or slower, file clearance, policy decisions for the industry and tax policies. Many amendments have been made in U.S. Lobbying Act which favors the corporate sector.

It is essential for those companies performing lobby to state publicly the firm’s name and the name list of the company executives or ex-officials or politicians involved in the lobbying phenomenon. The positions of each individual lobbyist should also be mentioned. This mass communication to the public will enlighten the community about the different lobbying expenditure in each sector. In India, this degree of transparency is ignored. Many secretive deals take place between the Government and the corporate. It is still baffling to know the exact lobbying expenditure for spectrum provision in the telecom segment. Another example can be that of the manifestations of Samajwadi party on behalf of a private company on the Indo-US Nuclear deal. Many proposals for entering the nuclear energy sector is on rise and the interested firms are resorting to lobbying but it is not disclosed. The companies lobbying position in India is concealed and hardly known to the public. This draws attention to the ‘accountability deficit’ in Indian lobbying mechanism.

CONCLUSION

It is a known fact that corporate lobbying is a necessary evil. As lobbying is legal in U.S, lobbying should be made legitimate in India. Lobbying happens in India all the time, but it is not transparent. Encouragement should be given to cultivate a culture, which embraces transparency in lobbying and dampen back-door lobbying. But efforts pertinent to maintaining a adequate number of lobbyist in each sector should be ensured. Otherwise free access to officials who devise important policies will take place. The Indian society should arrive at a solution whether to adopt open transparent lobbying, just like U.S. or follow the same old clandestine type of lobbying.

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