Analysis: Does Lobbying Regulation Work?
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Analysis: Does Lobbying Regulation Work?

The regulation of lobbying has become a heated political issue in many countries.

Arun Sudhaman

The UK Parliament’s leisurely consideration of lobbying regulation is not an initiative that sets the pulses racing. In contrast to the tumultuous events that sparked the consultation, and to the higher-profile Leveson inquiry into the media, hearings have proceeded in a rather less explosive fashion, as the Political and Constitutional Reform Committee (PCRC) investigates the introduction of a statutory register of lobbyists.

Which does not mean that proceedings are any less significant. The regulation of lobbying has become a heated political issue in many countries - since 2000, the number of countries pursuing lobbying regulation has doubled - and last week’s hearings considered the array of rules and regulations that are currently in place around the world.

This is important, because any exploration of a statutory register’s effectiveness must begin by examining how regimes in other countries have worked to date. To help their deliberations, the PCRC drafted in Dr Raj Chari from Trinity College Dublin, one of a trio of academics from Ireland who have produced an exhaustive guide to lobbying legislation around the world.

Why regulate?

To determine whether lobbying regulation works, look first to the reasons behind its implementation. These, says Chari’s co-author Dr John Hogan, can vary. “ In some places, people want transparency and in some places it’s reactive because of a crisis.”

In the US, perhaps the most tightly-regulated of all lobbying regimes, the push for transparency has gathered pace over the past 30 years. In Australia, meanwhile, lobbying regulation has proceeded in fits and starts in response to some high-profile scandals. The UK would probably fit the latter template, given some of the stories that have resulted in calls for stricter lobbying laws, but the country’s government should be wary of a knee-jerk reaction.

That much became clear when Chari noted that the UK’s proposals are too narrow, in three key areas:

1. Only professional consultancies are covered, which does not include in-house lobbyists from corporations, trade associations, NGOs, thinktanks. As an example, the controversial communications between News Corp and culture secretary Jeremy Hunt would not be covered under the current proposals. “You can have potential for scandal from other than professional consultancies,” noted Chari, adding that only 10-15 percent of lobbyists in other jurisdictions are professional consultancies.

2. Fewer details are required, particularly compared to countries like the US and Canada. In those jurisdictions, information is required as to who is being lobbied, who is doing the lobbying, which ministers are being approached, and how much money is being spent. The UK proposals, in particular, are weakened by not including spending disclosures.

3. Independent regulation remains unclear. Chari also noted that specific rules for cooling off periods have not been included, in contrast to markets where politicians are prevented from registering as lobbyists for at least two years after stepping down.

The global picture

Chari and his co-authors have helpfully demarcated different countries depending on the strictness of their lobbying regulations. The list looks something like this:

Low-regulation

  • Not much information required
  • No spending disclosures
  • No independent regulatory authority
  • Examples: European Commission, EU Parliament, Poland, Germany, Israel.
  • Chari: “It’s window dressing, it looks good but its actual effectiveness can be found wanting”

 

Medium-regulation

  • More information with regard to names and staff members involved in lobbying, the issues being lobbied about, potential ministries being lobbied, and specific bills.
  • Not much in the way of penalties.
  • Examples: Lithuania, Australia, Taiwan.
  • Chari: “The pros are there is much more information in terms of transparency. The cons are a lack of severe penalties.”

 

High-regulation

  • Full disclosure of information, including spending disclosures.
  • Penalties are enforced.
  • Complete public access to information.
  • Examples: US federal government, state governments in Washington, Kentucky, California, New York.
  • Chari: “The pros are increased transparency as to who is lobbying who, for which reasons and how much money. The cons are the costs to the state.”

 

The best approach?

It is tempting to see the highly-regulated US system as a beacon for an ideal standard of transparency, but not everyone is convinced. “I don’t actually think it has changed the influence of money on policymaking,” says Iain Anderson from public affairs firm Cicero. “Those that have most conversations with policymakers still seem to have the deepest pockets. I’m not sure what difference that high bar makes.”

Anderson, and many others, are also concerned about the spending implications in an era of austerity. The costs of a more regulated regime are undoubtedly higher - Anderson quips that we hardly need “OfLob” - but they may be unavoidable if trust in the political process is to be restored.

“I don’t think the government should be spending money to create another quango,” asserts Anderson. “There should be some form of licensing process where bodies can tender to run that statutory register.” The obvious choices, he notes, would be the CIPR, APPC or UKPAC.

At the other end of the spectrum is the EU register, a voluntary form of self-regulation that appears woefully inadequate. Anderson, who is also the vice-chairman of the APPC, supports this model. His argument is that all of the regulation in the world becomes impotent if it is not matched by a lobbyist’s intent to be transparent.

In his comments to the PCRC, Chari noted the importance of a “big stick”. It seems unlikely that a lobbying regime without enforceable penalties is likely to assuage public concerns about privileged access and undue influence.

Regardless of their precise specifics, both Hogan and Chari recommended bringing in regulations as soon as possible, rather than searching for the perfect set of rules. “Generally what happens is that countries then make amendments so that the legislation becomes more robust,” said Chari, pointing out that the effectiveness of the register can only really be gauged in practice.

Neither, added Hogan, do stricter rules always result in opposition from lobbyists. A little counter-intuitively, perhaps, he has instead found that regulation is generally supported by the public affairs profession. “Lobbyists seem to like them because they can point to them and say they are legitimate,” he says. “They use it as an advertising medium.”

That legitimacy is important, because the various scandals - whether genuine or not - have served to obscure the argument that lobbying is a fundamental democratic right. Hogan points out that this is not surprising; in unregulated jurisdictions, there is often an attitude that lobbying is synonymous with undue influence by special interests. “When regulations are brought in,” he adds, “those concerns are usually quieted down.”
 

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