LOBBYING SLOWLY REPLACING BRIBERY IN LESS DEVELOPED COUNTRIES

Lobbying is not just a rich-country phenomenon. It is already present in at least some of the less developed countries and is slowly replacing bribery as a means of influencing government policies.

• Lobbying activity increases and quite sharply with higher levels of GDP capita;
• Lobbying and bribing move in opposite directions. That is, lobbying substitutes for bribery;
• Lobbying is more effective than bribery in influencing policy
• Political stability, national institutions and various firm characteristics have a strong effect on a firms' decision to engage in lobbying.

More institutionalized ways of exerting political influence tend to be associated not only with deeper consolidation of the democratic process but also with tangible economic benefits for the firm to engage in lobbying activities.

Let's hope that development economists start placing less weight in "fighting corruption" and instead start thinking about new ways to "foster lobbying" in developig countries.