DETERMINANTS OF DIRECT CORPORATE EU LOBBYING
Submitted by christian on Tue, 04/14/2015 - 11:16
- Direct Corporate EU lobbying by non-EU corporations: Transnational corporations from outside the EU face incentives for direct political action that are not shared by firms from within the Member States: The absence of government patrons (member government with which they could work on European matters) that can advance and safeguard the interests of their national business communities in EU policy-making institutions. This logic applies to US, Japanese and Korean firms producing for global markets, including the common market of the EU. It also applies to firms from countries neighbouring the EU with very strong trade links to EU countries and from within the European Economic Area (EEA) that operate primarily within a common European market but are without government patronage at the EU level.
- Direct Corporate EU lobbying increases with firm size: The EU is indeed sufficiently important to attract lobbying from firms headquartered both inside and outside the EU: Its institutions legislate on the terms under which goods and services can be produced and traded in what is the largest economy in the world. Many businesses bear the costs or obtain the benefits of EU policies. But firms have neither equal resources nor equal incentives to participate politically, particularly if that participation takes place beyond national borders. Large firms with sufficient resources, a stake in the policy issue and the size to attract the attention of regulators ware more likely to lobby.
- Direct Corporate EU lobbying increases with government involvement in a firm’s operations: A company’s efforts to influence government decisions are a consequence of the level of government involvement through its use of coercive powers and through its distribution of resources in their operations and industry. Government involvement can take the form of regulation, subsidies or procurement. Of these, regulation is by far the most important mode of EU involvement in firms’ operations. Direct lobbying in the EU is indeed driven by legislative and regulatory activity. But the area of subsidies is also highly relevant. First, EU regulation on state aid directly affects the ability of firms to obtain subsidies from national governments. Second, firms are significant recipients of research and development funds under the EU’s ‘Framework programmes’. Crucially exposure to government action varies across firms and industries.
- Direct Corporate EU lobbying increases with the degree of industry concentration: Firms decide to participate politically under either of two conditions: First, they participate when government policies have a specific private effect rather than an industry- or business-wide public effect. Alternatively, they participate politically to secure a public or collective good when a firm is sufficiently large, or the industry sufficiently small, that the firm gets ‘such a large fraction of the total benefit that they find it worthwhile to see the collective good is provided, even if they have to pay the entire cost . These factors are commonly assumed to be reflected in indicators of market structure such as industry concentration.
- Direct Corporate EU lobbying increases for companies with no Member State patron: Firms with the resources and incentives to lobby adjust tactically to the particular opportunities for representing interests offered by policy arenas. In the EU institutional context, the firm-level propensity to lobby is linked to two distinct dimensions of the firm’s home country: whether or not the country is an EU member; and the country’s mode of interest group intermediation . The first dimension is a simple adaptation of the profit-seeking model to the differential availability of government patrons and to the strength of the patron. Despite an increasing supranationalization of EU policy-making through co-decision procedures and qualified majority voting, following the national route through their home countries’governments and the Council of Ministers remains an important option for business actors. Firms from EU member states enlist national governments to represent their interests in EU policy more effectively than do firms from non-EU member countries. Companies operating in EU markets but without the option to pursue interest representation through government patrons with a formal presence in EU decision-making bodies are particularly active in the EU policy arena to compensate for the lack of a Member State patron. The availability of interest representation through national channels affects a firm’s political tactics.
- Direct Corporate EU lobbying varies inversely inversely with the institutional power of the Member State patron: Patrons do not have equal influence in EU policy-making procedures and negotiations. There are numerous dimensions affecting the influence of EU Member States; one important dimension is the political weight accorded to them in EU policy-making bodies.
- Direct Corporate Direct EU lobbying varies inversely with the level of politico-economic integration or corporatism in the firm’s home country: Firms from pluralist contexts adapt more easily to EU-level interest representation than do firms that have been socialized in more integrated politico-economic systems.
- Direct Corporate EU lobbying increases with the strength of countervailing interests in a firm’s home country: In countries with strong and institutionally empowered countervailing interests (labour, consumer,environmental groups) business interests have an incentive to shift policy debates away from the national level. Furthermore, a strong domestic influence of trade unions and green parties might reduce the willingness and ability of governments to represent business interests at the EU level; this might thereby increase firm incentives to become directly politically active.
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