Bribery gets all the bad press, but lobbying is the real danger, because it affects everybody--whether they want it to or not.
Con men, swindlers and cheaters pay bribes. Sophisticates hire lobbyists because lobbyists get better, more lasting results while only rarely landing in the slammer. We know intuitively that bribery and lobbying are related, and there are reams of academic papers that try to draw the line between legitimate issue advocacy and corruption. President Barack Obama isn't buying it. As he swore in his new staff, he banned them from future employment lobbying the White House, "for as long as I'm president."
Economists and sociologists don't tend to spend a lot of time arguing in favor of illegal activities like bribing bureaucrats, so their efforts tend to come down in defense of the K Street bandits. The common argument is that bribery happens in developing economies where the rule of law is questionable, while lobbying is a more civilized activity that brings economic benefits.
What's telling about the Harstad and Svensson paper is that in an open society like the U.S., our brightest minds are unable to draw meaningful distinctions between handing someone an envelope full of cash and flooding a senator's campaign war chest, except to point out that lobbying is far more effective. A briber wants a to circumvent the law. A lobbyist wants to change it.
The fact that laws affect everyone supposedly makes lobbying more legitimate, since the lobbyist isn't typically asking for special treatment the way a briber does. But maybe that's the problem. Someone who pays a bribe might be rich, powerful and dangerous, but they're also uniquely vulnerable. They open themselves to extortion by the corrupt official they're using, for example. Harstad and Svensson write: "Promises by individual bureaucrats not to ask (or extort) bribes in the future are not credible, since such contracts cannot be written when corruption is illegal and because firms deal with different officials over time."
The lobbyist takes no such risk. The lobbyist's goal is to make the government official depend on them for financing and support in elections. A bribe works once. Cajoling or inducing a congressional representative to help get a law changed is the gift that keeps on giving.
In his book Knowledge and Decisions, economist Thomas Sowell defends lobbyists as people who have acquired a great deal of technical knowledge so that they're better informed than the general public about whatever issue they care about most. They then become, as Sowell describes, a powerful force in government because "reform through democratic legislation requires either 'public consensus or a powerful minority lobby.'" Sowell defends this influence since it comes from knowledge fairly gained and deployed. But the power of the lobbyist is far greater than the power of the briber. A powerful lobbyist can get laws changed even if there's no public consensus to do so, and yet those laws still apply to everyone.
Posted in: Corupption
