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MPIfG Working Paper 06/3, May 2006
Lobbying Systems in the European Union: A Quantitative
Study
Andreas Broscheid
, University of North Carolina, Pembroke
David Coen
, School of Public Policy, University College London
Abstract
This paper presents and tests a micro-theoretical
model of EU lobbying across policy domains. In particular, we focus on two
questions: first, we want to know why the number of interest representatives
differs across policy domains and, second, we investigate why we find
institutionalized fora for interest representation in some policy domains but
not in others. Our argument focuses on the Commission's need for expert
information and its costs of managing contacts with a large number of interest
representatives. Both factors provide incentives for the Commission to create
restricted-access fora as the number of interest representatives increases.
Using cross-sectional data on interest representation in a wide range of policy
domains, we find some support for our hypotheses.
Zusammenfassung
In diesem Artikel entwickeln und testen wir ein
mikrotheoretisches Modell, das zur Erklärung der Interessenvertretung in
verschiedenen Politikfeldern in der Europäischen Union beiträgt. Dabei stehen
zwei erkenntnisleitende Fragen im Vordergrund: Was beeinflusst die Zahl der
Interessenvertreter in verschiedenen Politikfeldern? Und weshalb richtet die
EU-Kommission in einigen Politikfeldern Foren mit beschränktem Zugang für
Interessenvertreter ein? Unsere Erklärung basiert auf der Beobachtung, dass der
Expertisebedarf der Kommission hauptsächlich durch Interessenvertreter gedeckt
wird, dass aber die Interaktion mit einer großen Zahl von Interessenvertretern
der Kommission Kosten (unter anderem Informationskosten) verursacht. Beide
Beobachtungen führen unseres Erachtens dazu, dass die Kommission Foren mit
beschränktem Zugang einführt, wenn die Zahl der Interessenvertreter ein
bestimmtes Maß überschreitet. Wir vollziehen einen ersten Test unserer
Hypothesen mit Querschnittsdaten der Interessenvertretung in verschiedenen
EU-Politikfeldern, und finden unsere Erwartungen zumindest teilweise erfüllt.
Contents
Introduction
[1]
The study of interest representation has been characterized by an interesting
micro/macro distinction. Many studies that emphasize a systemic or sub-systemic
perspective are dominated by informal theories and mainly descriptive empirical
approaches. In contrast, micro-level studies of lobbying processes emphasize
causal theories, which are frequently developed in a formal mathematical
framework. We do not find many macro studies that build on micro models of
lobbying, and we do not find many micro models of lobbying that address systemic
questions.
This paper intends to contribute to the debate connecting micro and macro
approaches to the study of lobbying. Using predictions from a formal model that
we have detailed elsewhere (Broscheid and Coen 2003), we present preliminary
statistical tests of the implications of our theory. Specifically, we try to
find answers to two questions:
1. Why does the number of interest representatives differ across policy domains?
2. Why do we find institutionalized fora for interest representation in some
policy domains but not in others?
We believe that a focus on organized interests targeting the European Commission
is a good starting point for this investigation. First, the currently dominant
formal theories of interest representation emphasize the role of informational
lobbying, which is usually acknowledged to be the predominant type of lobbying
of the Commission. As a result, the Commission can serve as a good empirical
test case. Second, the Commission's relatively independent and specialized
directorates focus on fairly cohesive sets of policies. The patterns of
interaction surrounding the directorates generally provide a useful operational
definition of policy domains. Thus, it is possible to compare different policy
domains with different lobbying costs, expertise requirements and the like.
Third, the study of European Commission lobbying is important as it deals with
the potential influence of European civil society on the institution that shapes
and implements legislation.
The paper will start with a brief overview of those aspects of the macro and
micro literature on interest representation that have motivated the present
study. We then provide a brief informal summary of our theory connecting the two
perspectives, followed by a discussion of our data and empirical results. In
conclusion, we present some perspectives for the study of European lobbying.
Micro and macro studies of lobbying
The main focus of system-level studies of lobbying has been the equality and
fairness of the representation of all social interests. Pluralist studies of
interest representation usually conclude that representation is generally fair,
as under-represented interests would become involved if their interests are not
sufficiently taken into account by decision makers (Truman 1951). The government,
from this perspective, appears mainly as a neutral broker between the different
interests.
The pluralist approach first came under attack from Olson's micro-level theory
of collective action, which argued that certain interests were less likely to
organize and hence to be politically influential (1965). Among macro-level
studies, this argument provided parts of a micro foundation of theories of elite
pluralism (for example, Schattschneider 1960) or studies of the varying power of
industry interests (among others, McFarland 1991). The most extreme
counter-theory to the pluralist argument of equal representation was
neo-corporatism, an approach that combined a descriptive account of interest
representation with an applied argument about the effectiveness of different
lobbying systems in such areas as social policy and labor relations. In contrast
to pluralist systems of interest representation, neo-corporatism was
characterized by a monopoly of representation through peak associations and
national labor unions (Streeck and Schmitter 1991). The great benefit of many
macro theories was the ability to describe and categorize different systems of
interest representation, and to provide a basis for comparative studies of
different political systems (see, for example, Wilson 1990). Their weakness was
often on the explanatory side, as Olson's criticism of pluralist theories
highlighted.
Pluralism, elite pluralism, neo-corporatism and their variants represent
high-level theories of entire political systems. A number of meso-level
approaches have focused on the inclusiveness of interest representation at the
sub-system level, particularly focusing on the distinction between insider and
outsider lobbyists (Broscheid and Coen 2003; Grant 2004). Depending on their
level of exclusivity, such sub-systems have been characterized as iron triangles
(Freeman 1965; McConnell 1966), subgovernments (McCool 1990), issue networks (Heclo
1978), or advocacy coalitions (Sabatier and Jenkins-Smith 1993). Insiders can be
simply actors that are frequently consulted (as in the case of issue networks or
advocacy coalitions), or they are actors actively involved in bargaining and
policy negotiation or in the implementation of policy solutions (Maloney et al.
1994). The main focus in this literature is on the categorization and
recognition of different types of policy networks and their role in the policy
process, not the explanation of their existence (for an exception, see the
studies in Marsh and Rhodes 1992).
The insider/outsider lobbyist distinction is of particular importance for the
study of European Union lobbying. While the European Commission attempts to be
open and transparent in its interaction with societal interests, nevertheless a
core of insiders has been established. We see an elite pluralist system in the
form of fora to which "access is generally restricted to a few policy players,
for whom membership is competitive and strategically advisable" (Coen 1997: 98).
The selection of lobbying insiders is managed and organized with a wide variety
of committees, working groups, conferences and other policy fora (Pedler and
Schaefer 1996). In this study, we investigate factors that may cause the
differently structured lobbying systems surrounding the European Commission.
This includes looking at the number of actors in areas dealing with different
types of policy questions as well as the question of insider lobbying through
European Commission fora.
In order to propose a causal explanation of lobbying sub-systems, it is
important to look at existing causal explanations of lobbying. The predominant
formal-theoretical approaches view lobbying as the strategic communication of
specialized information (for a recent summary, see Grossman and Helpman 2001).
Building on game-theoretic models developed throughout the 1980s (such as Kreps
and Wilson 1982; Crawford and Sobel 1982), these approaches argue that interest
representatives have policy-relevant information that policy makers need in
order to make effective policy decisions. If the political goals of interest
representatives and policy makers diverge, then information may be transmitted
in a biased manner. Although the policy maker takes informational biases into
account when interpreting lobbying signals, the informational advantage of
interest representatives provides them with political influence.
There are several variants of informational lobbying models. They can be based
on whether the information is about the interest representatives' constituents (Ainsworth
1993; Potters and van Winden 1990) or about the impact of the policy environment
on policy outcomes (Grossman and Helpman 2001). Other variations may be based on
the number of lobbyists and on their position towards each other (see, for
example, the Austen-Smith/Wright model on counteractive lobbying, 1992) or on
the nature of the signal (for example, on discrete versus continuous signals,
see Grossman and Helpman 2001; on costless versus costly signals, see
Austen-Smith 1995; Lohmann 1995). One common element of almost all informational
models is the fact that they investigate the interaction of one or two lobbyists
with a unified government. This makes it difficult to draw conclusions about
lobbying systems, which usually consist of more than two lobbyists. The model
that we use in this paper tries to tackle this problem.
The informational approach is particularly useful for the study of lobbying in
the EU (Crombez 2002). In Brussels the key to successful lobbying is not
political patronage or campaign contributions, but the provision of information.
In this context, the Commission, with its executive instruments and directives,
acts as the focal point in the early stages of the lobbying process. As a
technical bureaucracy it does not seek funds for re-election, but rather looks
for a policy community that may provide a source of grass-roots and
European-level information (Bouwen 2002; Coen 1997). The demand for the two
types of information may vary across policies. For example, if a policy deals
with technical standards or the regulation of sophisticated products such as
pharmaceuticals, substantive expertise is very important. On the other hand, for
policy that has (or might acquire) a high level of political salience in the
member states, the Commission requires information on the preferences of
relevant actors in the several states.
For the purpose of this study, we do not focus on the distinction between
different kinds of information. We argue that technological as well as
preference information addresses the question of whether a policy proposal "works,"
that is, whether it has a desirable outcome and whether it will be acceptable to
the actors involved in the political decision-making process. However, technical
information may be more costly to obtain, whereas information on preferences can
be obtained at low cost by some organizations. In both cases, the Commission has
to rely on private actors to provide it with much of the information it needs;
therefore, there is opportunity for interest representatives to influence policy.
Why are there more lobbyists in some policy domains than in
others? [2]
The number of groups representing different interests has been one of the most
important questions in the interest group literature; existing explanations have
focused on the number of potential group members and the role of selective
incentives, patrons, political entrepreneurs and other factors in mobilizing
these potential group members. Interestingly, a comparison of the number of
groups in different policy domains – the density of interest group populations –
is far less common (see, for example, Heinz et al. 1990; Mahoney 2004), and a
theoretical account of group density is missing. In order to provide such an
account, we believe that it is important to analyze the interaction between
groups and decision makers, as different policy domains may exhibit differences
in this interaction.
It has been observed that the interaction between interest representatives and
the European Commission (and other EU institutions) is based on information
(Bouwen 2002; Coen 1998). The Commission's staffing levels are very low,
compared to the extent of its tasks (van Schendelen 1996), and interest
representatives are often needed to provide expert information. At the beginning
of our theoretical investigation, we therefore ask under which circumstances
lobbyists are willing to provide useful information.
Lobbyists present specific positions on issues, and they can always present
their slant on a given issue. In the world of formal models of communication
(such as Gilligan and Krehbiel 1987, 1989; Lupia and McCubbins 1997), this is
called "babbling": the lobbyists (or the "senders" of information) provide a
standard recommendation, independently of whether the information consumer (or "receiver",
here the Commission) may agree with this information or not. We argue that
lobbyists always "babble" unless they receive specific incentives – rewards for
informative signals or punishments for non-informative signals – to provide
better information.
Why do lobbyists always babble, in the absence of rewards or punishment?
Consider a situation in which a lobbyist provides information that is damaging
to her [3] interests. The recipient of such information will surely take it very
seriously, as it is obviously not self-serving information. As a result, it is
very likely that the recipient (here the Commission) will act on this
information in a way that is detrimental to the lobbyist's interests. Therefore,
the lobbyist has no reason to provide this kind of detrimental information –
unless she receives a reward, essentially a compensation, for its provision or
is punished for not providing it.
Does the European Commission provide rewards for useful information? We believe
that it does, by providing privileged access to lobbyists and interest groups
that consistently provide such information. Actors with privileged access are
routinely consulted, invited to workshops, consultative fora, etc. that form
part of the policy-making process and allow lobbyists to influence policy more
effectively. Furthermore, access translates into knowledge about political and
administrative developments at the EU level, which in turn can translate into
advance knowledge about EU contracts or grants or into influence on the early
stages of the policy process (Coen 1998, 1999). These are all things that are
highly valued by lobbyists and interest representatives. By granting or denying
access, the Commission can reward useful information or punish babbling.
How does the Commission know whether a lobbyist babbles or provides useful
information? It learns it after the fact, once it has proposed a policy,
implemented a regulation, taken action to enforce a directive, issued a ruling,
etc. If its action turns out to be bad – a proposal fails in Council and
Parliament, member states resist a directive, a decision results in unexpected,
negative outcomes, and so on – the Commission has to conclude that the
information on which it acted was erroneous. If the Commission concludes that it
was "suckered" by self-serving information provided by lobbyists, these
lobbyists may lose their access and have to invest resources to regain the
Commission's confidence.
These considerations help us establish the incentives that can induce an actor
to become a European Union lobbyist – to enter the political fray and try to
influence the European Commission (and other institutions). First, a lobbyist
will attempt to influence Commission decisions because she has policy interests.
In political-economic terminology, a lobbyist expects policy utility gains if
the policy she prefers is supported by the Commission. These policy gains can be
ideological (if the Commission proposal conforms to the actor's political
outlook) or they can be material (in terms of budgetary transfers to the region
represented by the actor, for example, regulations that favor the actor's
industry, and so on). In general, it seems to make sense that actors are more
likely to become lobbyists if large policy benefits are at stake. However, our
formal model shows that the situation is more complicated (Broscheid and Coen
2003: 176). If potential policy gains are large, lobbyists have a stronger
incentive to babble, as the size of the policy gains outweighs the possibility
of losing access. This means in turn that under some circumstances high policy
stakes may lead to uninformative lobbying.
Second, the actor/lobbyist will receive non-policy benefits, such as information
on policy developments, European Union grants and contracts, and so on. As we
noted above, these benefits can be granted (and withheld) by the Commission as a
reward for accurate information (or as punishment for babbling). One interesting
property of these non-policy benefits is that they are divisible. Access is most
valuable if few other actors have it. If many actors in a policy domain gain
access to the Commission, however, its value decreases, as each actor receives
only a smaller share of the time each Commission official can spend with
interest representatives. In addition, the comparative advantage of inside
information decreases, as many other actors in the domain obtain this
information and can act on it. This has important consequences for the amount of
babbling versus informative lobbying that takes place: as more actors become
lobbyists, non-policy (access) incentives become diluted, and the incentives for
informative lobbying become smaller. Consequently, more lobbyists will be
tempted to present non-informative political propaganda instead of useful
information.
Third, the actor considering whether or not to become a lobbyist has to consider
the costs of lobbying. First, these costs consist of organizational costs –
mobilizing potential members, perhaps establishing a Brussels office, and the
like. Second, the actor has to incur informational costs. If she wants to be
taken seriously as a lobbyist, she has to show that the information that she
presents to the Commission is reliable and based on expert information. In some
cases, expert information is comparatively easy to obtain for a lobbyist; if the
information required by the Commission is about the preferences of the group of
actors represented by a lobbyist, the lobbyist simply has to survey her members'
preferences. In other cases, however, expert information is of a technical
nature and more difficult to obtain. Lobbyists may have to pay for scientific
and other expert studies to credibly provide the information demanded by the
Commission.
Taking these three factors together, an actor will become a lobbyist in a policy
domain if the expected policy and non-policy benefits outweigh the
organizational and expertise costs. How does this argument help us explain why
some policy domains have more lobbyists than other domains? Remember that
non-policy benefits decrease as the number of lobbyists in a domain increases.
As a result, there is an optimal number of lobbyists in any policy domain; if
this number is reached, there are no non-policy incentives for additional
lobbyists to incur the informational and organizational costs and join the
lobbying population as informed interest representatives. As we argued above,
without non-policy incentives the lobbyists would only babble if they joined
and, as a result, would not influence Commission policy – which means that there
are no policy benefits to be derived from lobbying.
But how do we determine whether the optimal number of lobbyists is larger or
smaller in a given policy domain? Here, we can consider the factors that
influence the size of non-policy benefits and organizational/expertise costs to
deduce two hypotheses:
Hypothesis 1. If the lobbyists in a policy domain receive greater
non-policy benefits from lobbying than in another domain, we can expect more
lobbyists to be active in the first domain.
Hypothesis 2. In a domain in which lobbying is comparatively costly, we
will find fewer lobbyists than in a domain in which lobbying is less costly.
Empirically testing the first two hypotheses
The choice of a viable unit of analysis constitutes a problem. Our theoretical
model talks about the number of lobbyists involved in the making of a particular
government decision. Therefore, a straightforward test of our theory would have
to look at the numbers of lobbyists involved in many different decision-making
processes. We do not have such data, and they are very costly to obtain in a
systematic manner. However, instead of looking at individual Commission
activities, we can investigate interest populations in different policy domains.
The hypotheses that we developed with respect to individual Commission
activities can be easily extended to policy domains:
Hypothesis 1A. If the lobbyists in a policy domain receive greater
non-policy benefits from lobbying than in another domain, we can expect more
lobbyists to be active in the first domain.
Hypothesis 2A. In a domain in which lobbying is comparatively costly, we
will find fewer lobbyists than in a domain in which lobbying is less costly.
Once we settle on policy domains as units of analysis, however, the difficulties
begin, since we have to determine the exact boundaries of policy domains at the
level of the European Union. Intuitively, we have a clear sense of different
domains – agriculture, health policy, chemicals, labor policy and so on, based
on the subject matter of laws and regulations. But a closer consideration leads
to difficult definitional questions, such as: Does fisheries policy belong to
agricultural policy, or is it a separate policy domain? Does pharmaceuticals
policy belong to chemicals policy or to health policy, or is it a domain on its
own? The answer is structural: policy domains can be identified as patterns of
actor networks. Unfortunately, this creates an empirical problem: since we want
to explain the structure of policy domains, we cannot use such a structure to
define our units of analysis and thus our dependent variable. We have to find an
independent indicator to distinguish between policy domains.
Our solution to the problem is to rely on existing institutional boundaries
provided by the European Commission. Each directorate general (DG) that is
involved in policy making and policy implementation roughly conforms to a policy
domain, or a set of closely related policy domains. The institutional structure
of directorates general is based on, and creates, patterns of regular
interaction between different groups of governmental and non-governmental actors,
which approximate the shape of existing policy domains. Furthermore, the
jurisdictional boundaries of directorates general are obviously not the results
of our empirical analysis, thereby guaranteeing that we do not choose those
domain boundaries that create empirical support for our hypotheses.
Comparing the number of lobbyists associated with each directorate general
creates new problems, as DGs differ in range (the number of policy issues they
deal with) and intensity (the amount of policy-making activity they engage in).
The latter factor is not a serious problem for us since the intensity of
Commission activity is implicitly part of our theoretical discussion – it leads
to varying levels of policy and non-policy benefits for groups. Policy domains
with equal levels of Commission activity would be useless for our analysis. In
fact, our main independent variables encode information about the levels of DG
activities.
Our dependent variable is the number of interest groups active in a policy
domain, which we obtain from the European Commission's Conneccs database. This
database contains listings of labor and employer organizations, business
associations, NGOs, and community-based organizations. Conneccs entries are
based on voluntary reports by interest groups, which also detail one or more
predefined policy areas in which they are active. As the Conneccs policy areas
closely conform to the jurisdictions of different directorates general, it is
easy to obtain the dependent variable from these data.
Although Conneccs relies on self-reported entries, we believe that it provides
valid data for our present inquiry. First, our theory refers to interest
representatives who have incurred the expertise and organizational costs of
credible lobbying. It is likely that the Conneccs database weeds out to some
extent those groups that are not serious participants in EU lobbying. Second,
our investigation focuses on the European Commission. Even though there are
additional databases of EU interest representatives, we believe that Conneccs is
useful for our purposes as the European Commission created it. Hence, it is
likely to exclude those actors that do not interact with the Commission.
In order to test our hypotheses, we have to identify data that measure
non-policy benefits and lobbying/organizational costs. Unfortunately, it is very
difficult, if not impossible, to measure these types of costs and benefits
directly. However, we can observe indirect indicators that provide us with a
sense of whether such costs and benefits are higher or lower in different policy
domains. First, we code the number of policy-related units of each DG as an
independent variable. While the number of units records the complexity and
number of policy issues that a DG deals with, it also provides a measure of the
policy benefits provided by the DG. Second, we include the number of DG staff as
an independent variable. This measure serves as a proxy of both policy and
non-policy benefits of lobbying. The more staff a DG has, the more policy it can
propose, implement and enforce. Furthermore, since non-policy benefits are to a
large extent linked to contact with Commission officials, an increased number of
staff will result in higher non-policy benefits. Since policy benefits are
already controlled for by the number of units, the coefficient of the staff
variable will reflect mainly the impact of non-policy benefits on the number of
interests.
The organizational costs of groups are difficult to measure at the macro level.
As an approximation, we suggest that broad differences between policy areas
reflect organizational and lobbying costs. In regulatory policy domains, the
Commission requires a comparatively high level of expertise input and, as a
result, interest representatives are expected to provide such information. This
increases the costs associated with lobbying. Conversely, in distributive policy
domains,[4]
lobbying involves to a larger extent the representation of group
interests; the expertise required in such policy area is more of an
administrative nature and not likely to be provided by lobbyists. As a
result, we assume that organizational costs are lower in distributive
policy domains than in regulatory policy domains and the number of
groups are correspondingly larger. We code distributive policy domains
with a dummy variable that is '1' for the DGs Agriculture, Education
and Culture, Employment and Social Affairs, Fisheries, Regional Policy,
and Research and '0' for all other directorates general. Our hypothesis
predicts that the coefficient of this variable is positive. However, it
is possible that the distinction between distributive and regulatory
policy domains corresponds not only to expertise requirements but also
other to factors. In particular, as the European Union is predominantly
a regulatory policy maker, we can expect policy type to be associated
with the intensity of Commission policy-making activity. By including
the number of policy units in our regression model, we try to control
for this factor. However, if policy units do not perfectly capture the
amount of policy making, the estimated impact of policy type on the
number of groups may be negative rather than positive.
We include three control variables in our analysis. First, the age of the policy
domain is important. As time passes, more groups can be formed; conversely, in "young"
policy domains, some groups may not yet have been formed. Lowery and Gray
(1995), for example, make this argument in regard to the American states. On the
other hand, it is possible that new policy domains have a larger number of
groups: the transfer of authority to the European Union may be the result of
increased interest representation. Also, the Commission may be particularly
active in new policy domains and thereby trigger group activity. We
operationalize the age of a policy domain with a dummy variable that marks
Justice and Home Affairs, Humanitarian Aid, and Health and Safety. In terms of
Commission authority, these policy areas are not older than the Amsterdam Treaty:
Justice and Home Affairs, for example, was transferred to the First Pillar of
the EU by the Amsterdam Treaty.
The second control variable marks policy domains in which national or
sub-national governments play a dominant role. We suppose that in such policy
domains we should find fewer societal interest groups because the main interests
are represented by governments (and their organizations). We use a dummy
variable that is '1' for Competition, Economic and Financial Affairs,
Enlargement, External Relations, Justice and Home Affairs, Regional Policy,
Taxation and Customs Union, and Trade.
The third control variable is the number of consultative fora for interest
representation. In the second part of this paper, we will focus on this variable
as a dependent variable. Here, we include it to investigate whether there is the
possibility that there is mutual causation between the number of groups and the
number of fora. Substantively, consultative fora could foster the formation and
participation of groups, as they create an insider-outsider divide that provides
incentives for outsiders to become insiders.
We use an OLS regression model to estimate the relationship between the
variables. We are aware that such a model may not be, strictly speaking,
appropriate, as we are dealing with count data. However, the dependent variable
ranges from 10 groups (Fisheries) to 221 groups (Enterprise), and it can be
treated as approximately continuous. Since the variable is bounded below by zero,
we use the logarithmic transformation of the dependent variable for our
estimation. Since the resulting regression is nonlinear, we use bootstrapped
error estimates and confidence intervals based on the bootstrapped coefficient
quantiles (for more information on bootstrapping, see Shikano 2006).
The results are summarized in table 1. Our main variables of interest provide
mixed results: the number of personnel has a positive relationship to the number
of groups, but the estimated coefficient is not significant (the confidence
interval includes the value 0); the number of policy units has a negative
coefficient, contrary to expectations, but that coefficient is also
insignificant. Distributive policy domains, in contrast, differ significantly
from other policy domains; however, they have fewer interest groups than
regulatory policy domains, not more, as predicted by our theoretical model.
Newer policy domains have more, not fewer actors, contrary to our presumption,
even though this difference is not significant. As predicted, policy domains in
which national government interests dominate have fewer groups, but the
difference is not significant, either.
The main substantive result of our estimation is the impact of the number of
fora, which has a significant and sizeable coefficient. Due to the logarithmic
transformation of the dependent variable, the substantive impact of the number
of fora depends on the value of the dependent variable and is not easily
summarized. For example, at the mean value of the dependent variable (about 59
groups) an increase of the number of fora by three increases the number of
groups by ten. How can we explain this relationship? First, the number of fora
may simply be an indicator of the political activity of the Commission (see
Mahoney 2004). More active directorates general, such as Agriculture, should
have more fora than other DGs, and they will attract more groups. Second, fora
may stimulate group participation by creating an insider-outsider dynamics. As
Coen noted, interests groups compete to have seats at the inner policy tables
and are willing to spend significant funds to develop positive European
credentials for favored access (Coen 1997, 1998). In such a competitive
environment it is possible to envisage that the Commission pump-primes lobbying
activity by initially inviting insiders that have proven themselves in the
Brussels environment and then, on occasion, funding the creation of new
pan-European groups. As a result, potential insiders step up their EU lobbying
activity to establish credibility and improve access in later rounds of policy
making. Under such conditions the creation of fora and the emergence of policy
insiders can ratchet up interest group activity in Brussels.
One possible reason for the insignificance of the personnel and policy-unit
variables may be multicolinearity among these factors. Indeed, the two variables
are highly correlated (0.91), which possibly leads to inflated standard errors
and coefficients that are sensitive to small changes in the regression
specification. We tested for this by estimating two versions of the regression
model that removed either the personnel or the policy-unit variables; the
results did not change substantially.[5]
Another problem that may lead us to underestimate the impact of our independent
variables is the possibility that outliers and/or influential cases are
responsible for some of the results. In order to check for this possibility, we
ran several standard tests that identify outliers and influential observations. [6]
The observations corresponding to Education and Culture and DG ECHO (Humanitarian
Aid) were consistently marked by these methods. Regression results that exclude
these two observations are summarized in table 2. Overall, the results are not
much different from those that include the two influential observations, except
that now the coefficient for new policy domains is significant and positive.
So far, the results are mixed. If we inspect the entire data, the number of fora
and the difference between regulatory and distributive policy domains exhibit
significant impacts on the number of groups. If we exclude two influential
observations, the age of policy domains becomes significant. Except for the
number of fora, the impact of the significant independent variables do not
provide clear evidence for our theoretical model, even though they help us
understand the factors that influence the number of interest groups in a policy
domain.
Why are there more interest representation fora in some policy
domains
than in others?
The second general question that this paper addresses deals with the conditions
under which the Commission establishes fora for interest representation, thereby
giving some interest representatives privileged access. We argue that the
decision to establish fora is the result of a trade-off between the
informational needs and the legitimacy needs of the Commission. As in our
discussion of the number of groups in a policy domain, we provide a non-formal
summary of arguments whose formal derivation has been presented elsewhere (Broscheid
and Coen 2003).
We have argued above that the provision and possible withdrawal of non-policy
incentives by the Commission constitutes an important incentive for lobbyists to
provide accurate information. Furthermore, we have argued that, in the case of
the Commission, these incentives are closely linked to the provision of access
to decision-making processes: those actors that provide accurate information
will be rewarded by continuous access, and those that are found to have provided
inaccurate information will be excluded. The problem with such access-related
incentives is that as more actors receive those incentives, the amount each
individual actor receives decreases. As a result, "crowded" policy domains will
provide smaller incentives for lobbyists to provide accurate information – they
babble.
If the number of interest representatives is too large, we can talk about "access
overload" (Coen 1997): the number of interest representatives dilutes non-policy
incentives to such a degree that there is little informative lobbying and lots
of babbling. We argue that in such a situation the Commission has incentives to
select some interest representatives and provide them with privileged access,
thereby increasing the non-policy incentives those representatives receive. [7]
Since selected interest representatives can lose their privileged access if it
turns out that they provide inaccurate information, the Commission thus creates
incentives against babbling. One possible strategy of selecting insiders is the
creation of fora for interest representation in which Commission officials
regularly consult with a select group of societal actors. This argument leads us
to our third hypothesis:
Hypothesis 3. The probability of observing Commission consultation fora
for societal interests increases with the number of groups in a policy domain.
Why do we talk about the probability of observing fora, instead of stating that
a large number of groups (deterministically) leads to the creation of fora? The
answer is that there are several other important factors that we believe
interfere with the informational rationale of granting privileged access to some
lobbyists. The key to these interfering factors is legitimacy. As a
non-majoritarian institution with comparatively little democratic oversight, the
European Commission has to exercise a variety of politically charged duties,
such as the proposal of European legislation or the formulation of
administrative guidelines, opinions and the like. Without a democratic basis,
the legitimacy of Commission decisions is fragile and has to rely on
accountability, shared norms, broad-based support for policy output, and regular
consultation with a wide range of societal actors.
Scharpf (1999) distinguishes between input-oriented and output-oriented
legitimacy. As to input-oriented legitimacy, Scharpf states that "modern
input-oriented theorists rarely derive legitimacy primarily from the belief that
'that people can do no wrong.' Instead, they insist that policy inputs should
arise from public debates that have the qualities of truth-oriented
deliberations and discourses" (269). If we view input legitimacy from this
perspective, then the Commission has to solve a dilemma. As it does not derive
its authority directly from the people, it has to rely on public, truth-oriented
debates. On the one hand, this means that it has to foster "truth-oriented
deliberations," which may require it to establish institutional structures that
limit "babbling" – Commission fora. On the other hand, it has to establish
public debate in policy areas that often are highly technical and of low public
salience. As the Commission restricts access to a few privileged actors, it
limits the breadth of public debate, while at the same time increasing the truth
orientation of the debate. According to these considerations, Commission fora
should be more likely if policies require reliable information rather than
broad-based consultation; we suggest that it is technical, regulatory policy
domains that will see the establishment of fora as the number of interest groups
becomes too large.
With respect to output-oriented legitimacy, Scharpf argues that "collectively
binding decisions should serve the common interests of the constituency" (268).
Since the Commission has no direct majoritarian basis, it has to determine the
common interest through consultation. For policies that affect a wide range of
actors and that are fairly non-technical, this requires broad consultation of
societal actors and a consideration of their political demands. In such policy
domains, the selective restriction of access will lead to a lower degree of
legitimacy for Commission decision making. For policies that are highly
technical and of low salience, the quality of information that the Commission
uses for policy making is more important. Hence, in such policy domains it is
more likely that the Commission is willing to restrict access in order to
improve the informational basis for its policies and hence improve their output
legitimacy.
These considerations lead us to our fourth hypothesis:
Hypothesis 4. The Commission is more likely to establish fora in policy
domains in which technical information is required to make good policy. In
policy domains that are less technical and that affect a large number of
societal actors, Commission fora are less likely.
Empirically testing hypotheses three and four
The empirical test of our explanation of fora creation is based on the same unit
of analysis and the same data used in our analysis of the number of groups in
different policy domains. The dependent variable is the number of fora in
different policy domains (which coincide with Commission directorates general).
The first independent variable of interest, the number of groups, is our
previous dependent variable and does not have to be discussed any further. More
difficult is the creation of a measure for the level of technical information
required in a policy domain, and the number of societal actors affected by it.
We try to solve this difficulty by relying on the general distinction between
regulatory and distributive policy domains. Distributive policy domains may be
bureaucratically complicated, but this type of administrative expertise can be
presumed to reside in the Commission bureaucracy that grew with these policy
areas; the Commission will not demand administrative expertise from societal
interests. Also, distributive policy domains such as agricultural or regional
policy affect a wide range of actors and are of comparatively high public
salience. Regulatory policy, on the other hand, is usually fairly technical, of
low salience, and directly affects only a small number of social interests (because
even though there may be indirect effects – for example, if regulation causes
higher prices – affected actors tend not to attribute these effects to the
policy). We measure the distinction between regulatory and distributive policy
with the same dummy variable used in our analysis of the number of groups.
Since a large number of groups is expected to be associated with Commission fora
in regulatory policy areas, we also include a cross-variable of the
distributional policy dummy and the number of groups. If the coefficient of the
groups variable is positive (which is expected), then the cross variable should
be negative. As control variables, we include measures of the number of
personnel (as more personnel may facilitate the organization of fora) and the
age dummy used in the group analysis (as newer policy domains may not have
established fora even though they may in the future).
The dependent variable – number of fora per policy domain/DG – is a count
variable, ranging from zero to 30. Since 13 of the 21 cases are located at the
lower bound (no fora or just one forum), the assumption of a continuous
dependent variable, which is essential for OLS, is violated. Due to the small
number of cases, it is not possible to estimate a model that is appropriate for
count data with a large number of zero observations (such as a zero-inflated
Poisson model). We make do with a transformation of the dependent variable:
first, we project the data range to the unit interval, by dividing the variable
by 30 (the largest value). Then, we take the log-odds ratio of this variable,
and essentially estimate a logistic regression with OLS. The coefficients will
be difficult to interpret substantively. However, since we are mainly interested
in the directionality of the coefficients, this does not matter.
Table 3 summarizes the results. The number of groups in a policy domain is
strongly related to the number of fora – domains with more groups tend to have
more fora, too. This conforms to our expectation. What does not conform to our
expectation is that the number of groups is no less important in distributive
policy areas. In fact, the coefficient of the interaction variable is positive,
not negative, and it is not significant. In fact, no variable besides the number
of interest groups is significant.
Since there is no significant interaction effect between the type of policy area
(distributive/regulatory) and the number of groups, we exclude this variable
from the analysis. Table 4 contains the resulting estimates. We find that the
interaction term had masked the impact of the distinction between regulatory and
distributive policy domains. If we exclude the interaction, we find that
distributive policy domains have significantly more fora than regulatory policy
domains. This is a significant but unexpected result. We predicted that we would
find more fora in regulatory policy domains, which rely more on expertise and
less on input legitimacy, than in distributive policy domains. The actual
results contradict our expectations.
We can only speculate about the reasons for this relationship. One possibility
is that regulatory policy domains are less prone to suffer from access overflow.
They may be highly complex, specialized policy domains, in which a large number
of interest groups reflects the complexity of the subject matter. Also, it is
possible that in these policy domains we may find informal ways to distinguish
insiders from outsiders. For example, many groups which, in the Conneccs
database, claim to be active in a regulatory policy domain may in fact not
participate in policy-making processes. In distributive policy domains, on the
other hand, we may find that all groups that are interested in the policy are in
fact lobbying the Commission, thereby creating access overflow. The reason for
this increased willingness to lobby may be the greater technical simplicity of
the subject matter under debate. These considerations are merely speculative.
However, they point to research questions that might be profitably pursued in
the future.
Overall, the results provide mixed support for our hypotheses. The main message
is that there is a relationship between three factors: the number of groups in a
policy domain, the number of fora in a policy domain, and the question of
whether the domain deals with regulatory or distributive policy. More groups are
associated with the number of fora, as our theoretical discussion predicted.
However, in regulatory policy domains we find more groups but fewer fora,
exactly contrary to our expectations.
Before we place too much weight on these results, we should offer a note of
caution. We are dealing with a system of equations in which the dependent
variables in both equations are endogenous: the dependent variable of one
equation is an independent variable in the other equation, and vice versa. It
can be shown that the error terms of such "non-recursive" systems of equations
are correlated with each other, and with the independent variables, leading to
potentially biased coefficient estimates (Achen 1986).
Discussion
To what extent do our results support or contradict our hypotheses? Overall,
there is evidence for two of our main contentions: first, that Commission
activity influences group activity and, second, that group activity leads to the
creation of fora for interest representation. To start with the second argument,
our results demonstrate a strong relationship between the number of groups and
the number of fora – the more groups, the more fora. This conforms to our
argument that the creation of lobbying insiders is a reaction to lobbying
overload. In the other direction, we find that distributive policy domains have
fewer groups than regulatory domains. Since the European Union tends to be more
active in regulatory policy domains, this relationship points to the supply of
policy benefits as an incentive for group activity. In addition, new policy
domains exhibit a larger group presence than older domains. This may partly be
due to the fact that, in new policy domains, governments tend to engage in the
production of new policies that attract attention by societal actors.
One of our more puzzling findings is the fact that distributive policy domains
tend to have more fora than regulatory domains. Since distributive policy
domains tend to have fewer groups, our lobbying-overload argument cannot quite
capture this relationship. One possible explanation is that the relationship
indicates that Commission fora can perform roles that our theoretical arguments
do not capture. In distributive policy domains, for example, fora may not be
used to generate expertise but to assure consultation with all stakeholders that
may be affected by a policy – to generate input legitimacy, to use Scharpf's
terminology (1999).
Another interesting – but methodologically worrisome – finding is the fact that
the number of fora not only seems to be influenced by the number of groups, but
also seems to influence the number of groups in a policy domain. On the one
hand, this confirms our argument that government activism leads to group
activism. Also, we can view fora as an additional source of private benefits
supplied to lobbyists, thereby making their activities more profitable. However,
methodologically, the apparent two-way relationship between groups and fora
indicates a problem of mutual causation, which has been shown to lead to biased
parameter and error estimates. Due to the small number of cases, cross-sectional
solutions to this problem – such as the use of instrumental variables – are not
viable.
Even though we cannot solve the methodological problem, we can use it to draw
substantive implications. Possibly, the statistical relationship between the
group and fora variables points to a substantive bi-directional relationship. On
the one hand, there is the relationship discussed in the theoretical arguments
presented in this paper: large numbers of lobbyists lead to uninformative
lobbying signals, and the Commission reacts with the selection of lobbying
insiders. On the other hand, the distinction between lobbying insiders and
outsiders may create costs for lobbying outsiders, who may now be induced to
invest resources to convince the Commission to select them as insiders, too. In
other words, the creation of fora pump-primes group activism. This process may
be reflected in the Conneccs data, as groups who in the past have been
marginally involved react to the creation of fora with, among other things,
creating entries in the database.
Substantively, then, the mutual relationship between groups and fora points to a
dynamic process that cannot be captured by a cross-sectional sample. As a result,
one of our main methodological insights is a call for studies that investigate
the dynamic nature of European Union lobbying. In addition, we show that the
study of group mobilization in the European Union should not be conducted
without the simultaneous investigation of policy making that affects the studied
groups, and vice versa.
Conclusion
The main theoretical concern of this study has been a micro-level foundation of
macro-level characteristics of lobbying systems. Even though the empirical
results that we present are preliminary and so far lack the necessary detail,
they provide modest support for our arguments. The overall pattern that emerges
is that factors associated with the level of European Commission policy making
are related to the number of groups in a policy domain: there are more groups in
new and in regulatory policy domains; the presence of Commission fora for
interest representation also constitutes a predictor of the size of the lobbying
population. In addition, one of our main theoretical arguments – that lobbying
fora are a reaction to large numbers of lobbyists – seems to be supported by the
fact that the policy domains with large numbers of interest groups also have
more fora.
Besides providing initial support for our arguments, the results of our study
indicate the direction future research has to take. In particular, the unclear
directionality of the relationship between the number of interest groups in a
policy domain and the number of fora indicates that the dynamic nature of
lobbying has to be taken into account in the future. This contention receives
support from the literature on lobbying in the United States, which has pointed
to the presence of policy-making and lobbying cycles, in which interest group
pressure, policy-making and interest group reaction to policy change alternate (see,
for example, Vogel 1989; McFarland 1991). In addition, a dynamic perspective on
European Union lobbying also requires an extended theoretical focus that takes
account of the interaction between interest group pressure, the resulting
institutional structuring of the interaction between EU and lobbyists, and the
resulting incentive changes for lobbyists. Recent initiatives to increase the
transparency of EU lobbying serve as a reminder that institutional change in
interest representation is a continuing presence in European Union politics.
Data Appendix
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Endnotes
1
We would like to thank Pieter Bouwen, John Constantelos, Fabio Franchino and
Christine Ingebritsen for their comments on earlier versions of this paper, and
Jürgen Feick, Jörg Teuber and Cornelia Woll for their constructive criticism
that has made this working paper possible. Nevertheless, all errors and
omissions are the fault of the authors.
2
We provide a formalization of our theory in Broscheid and Coen (2003); here, we
present an intuitive summary of our argument.
3
Following conventions common in game theory, we denote the first mover in an
interaction with the female pronoun. As a result, lobbyists are female in our
presentation, and politicians are male.
4
Lowi and Wilson distinguish between distributive and redistributive policies. As
both types of policies deal with the distribution of material values, it is not
necessary for our purposes to distinguish between them.
5
These results are not reported here, but the authors will provide the results
upon request.
Specifically, we inspected the hat matrix, dfits and dfbetas. For an explanation
of these indicators, see Bollen and Jackman (1985).
6
An alternative reaction to access overload is the consolidation of interest
representatives into larger organizations. We do not pursue this possibility in
the present study.
Copyright © 2006 Andreas Broscheid, David Coen No part of this publication may be
reproduced or transmitted without permission in writing from the author.
Jegliche Vervielfältigung und Verbreitung, auch auszugsweise, bedarf der
Zustimmung des Autors. MPI für Gesellschaftsforschung,
Paulstr. 3, 50676 Köln, Germany
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