Is there a theory, that states that there is more lobbying in higher regulated industries?

2

I have been reading a lot about empirical facts about lobbying and I though I read some hypothesis like "the more regulated an industry, the more lobbying occurs".

Is someone able to help me with any traces, that could help me finding this quote, if ever it exists?

Empirically it seems true, and I could provide some exemplarily evidence for it.

canIchangethis

Posted 2016-12-16T16:08:04.403

Reputation: 71

1Well the two most regulated things in America are guns and mortgages, and while there is lobbying there, not as much as other areas. And the abortion industry has very little regulation, and there is intense lobbying. Also depends on what you define as lobbying? Campaign donations? – K Dog – 2016-12-16T16:14:32.473

The quote seems quite logical when talking about industrial lobbying. There is no reason for industry lobbying when there are no regulations. And the more regulations you have, the more details you have which the industry can complain about. But there is also lobbying from non-profit organizations which usually has the goal to increase regulation. It might be worth analyzing if such groups prefer to work on sectors which are still largely unregulated or rather on those where they have already succeeded in getting regulations. – Philipp – 2016-12-16T16:25:16.813

Thanks! I actually thought about industrial lobbying (campaign contributions, PACs but also other forms like in house or external lobbyists). – canIchangethis – 2016-12-16T18:52:17.830

Some countries forbid lobbying, I guess in this case your theory would not apply – user5751924 – 2016-12-30T13:08:33.857

Answers

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Yes - but you have the relationship backwards. Lobbying causes regulation. This is called interest group theory.

Interest Group Theory

Interest group theory says that groups band together to solicit benefits from the government. There are plenty of one-time benefits (a single piece of legislation, for example), but when an interest group is really successful it becomes regulated.

Regulation provides a mechanism for the interest group to continuously receive benefits. For example, the Department of Labor regulates labor in the United States. It exists because of lobbying from organized labor. It's principle policies provide benefits to labor (either individual workers or organized labor).

The same goes for the Department of Agriculture, Mines, Commerce, and others.

indigochild

Posted 2016-12-16T16:08:04.403

Reputation: 22 718

Will come back and add citations once I dig out my old syllabus on this subject. – indigochild – 2016-12-16T20:27:02.793

1Thanks. Well this I know for example from Stigler (1971) "the theory of economic regulation". But are you sure it is not also the case the other way round? – canIchangethis – 2016-12-16T20:47:29.633

1I mean for example nuclear powers plants are highly regulated, or any firm – canIchangethis – 2016-12-16T20:50:59.937

like Pharma are highly regulated, or any other firm that has a potential risk. (Sorry, cannot edit and make it one comment :( ) – canIchangethis – 2016-12-16T20:53:03.080