Lobbying, Corruption and Other Banes

47 Pages Posted: 14 Sep 2008

See all articles by Nauro F. Campos

Nauro F. Campos

University College London; University of Michigan at Ann Arbor - The William Davidson Institute; IZA Institute of Labor Economics

Francesco Giovannoni

University of Bristol - Department of Economics

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Abstract

Although the theoretical literature often uses lobbying and corruption synonymously, the empirical literature associates lobbying with the preferred mean for exerting influence in developed countries and corruption with the preferred one in developing countries. This paper challenges these views. Based on whether influence is sought with rule-makers or rule-enforcers, we develop a conceptual framework that highlights how political institutions are instrumental in defining the choice between bribing and lobbying. We test our predictions using survey data for about 6000 firms in 26 countries. Our results suggest that (a) lobbying and corruption are fundamentally different, (b) political institutions play a major role in explaining whether firms choose bribing or lobbying, (c) lobbying is more effective than corruption as an instrument for political influence, and (d) lobbying is more powerful than corruption as an explanatory factor for enterprise growth, even in poorer, often perceived as highly corrupt, less developed countries.

Keywords: lobbying, corruption, political institutions

JEL Classification: E23, D72, H26, O17, P16

Suggested Citation

Campos, Nauro F. and Giovannoni, Francesco, Lobbying, Corruption and Other Banes. IZA Discussion Paper No. 3693, Available at SSRN: https://ssrn.com/abstract=1267834 or http://dx.doi.org/10.2139/ssrn.1267834

Nauro F. Campos (Contact Author)

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

University of Michigan at Ann Arbor - The William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

Francesco Giovannoni

University of Bristol - Department of Economics ( email )

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University of Bristol
Bristol, BS81TU
United Kingdom
+44 117 928 8430 (Phone)
+44 117 928 8577 (Fax)

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