Is U.s. Formalized Lobbying More About Nefarious Corruption or Benign Industry Information Provision? Evidence from Foreign Firms Lobbying in the U.s.
Abstract: The literature on lobbying and corruption is at an impasse between those studies arguing that U.S. formal corporate lobbying with mandated disclosure is primarily a conduit for corruption and other studies that contend that this type of corporate lobbying is primarily about benign industry information provision to policy makers. Prior work demonstrated how home-country corruption is a robust predictor of corrupt behavior by home country-based groupings of foreign diplomats residing in the United States. In this study, using a rarely utilized data set on U.S. formal lobbying with mandated disclosure at the federal level, we ask whether instrumented home country corruption is a robust predictor of U.S. formal corporate lobbying with mandated disclosure by home country-based groupings of foreign companies operating in the United States. In a counterintuitive finding, we show that U.S. formal lobbying is far more likely to be conducted by companies from the least corrupt home countries. This is true after relying on a proven instrumental variables (IV) approach for identification and after ruling out other alternative explanations based on country wealth, industry portfolio, and innovation. Overall, the results are consistent with the idea that U.S. formal corporate lobbying is relatively more about benign industry information provision to policy makers than about nefarious corruption. Other channels such as bribery still could remain for companies from the most corrupt countries to engage in nefarious corruption in the U.S.
