How lobby organizations engage in the policy-making process

Policy changes and initiatives are often triggered by the stakeholders that are going to be affected by those future policies. Citizens and smaller stakeholders often have very limited influence over the process of policy-making. But what is the structure of networks in which lobby organizations operate? A new article published in Applied Network Science provides a first step in the understanding of how lobby organizations engage in the policy making process.

This blog has been cross-posted from the SpringerOpen blog.

The quote Laws, like sausages, cease to inspire respect in proportion as we know how they are made (by John Godfrey Saxe, ca. 1869) is often misattributed to the first Chancellor of Germany, Otto von Bismarck. So is politics as a reflection of the will of the people. Traditionally, policy making is understood to be centralized and hierarchical. Yet as we, as well as society at large, mature, so does our demand for participation in the process. Thus, through sophistication we shatter: many bemoan difficulties faced, few offer any coherent suggestions on how to approach this.

Policy changes and initiatives are often triggered by the stakeholders that are going to be affected by those future policies, e.g. a specific sector of the industry. In democratic countries policy makers typically consult a limited number of experts and the largest stakeholders directly involved before issuing a new policy proposal.

In many countries, governments are working on improving the communication with citizens and stakeholders to increase their involvement in the law-making process

This process leaves citizens and smaller stakeholders underrepresented in the process of policy-shaping, as the process can be very much on the government’s terms. Therefore, in many countries, governments are working on improving the communication with citizens and stakeholders to increase their involvement in the law-making process. As an example, the European Commission (EC) has been making a significant effort to engage an increasing number of citizens in the EU law-making process by means of open public consultations.

In this context, we explored publicly available information about the European lobby organizations from the Transparency Register, and from the open public consultations in the area of Banking and Finance. We considered three complementary types of information about lobbying organizations: their formal categorization in the Transparency Register, their responses to the public consultations, and their self-declared goals and activities. We considered responses to the consultations as the most relevant indicator of the actual leaning of an individual lobbyist.

The organizations responded to a various consultation’s topics, from a Capital Market Union, non-financial reporting guidelines to the corporate tax transparency – to name just a few. Analyzing the organizations’ engagement in the consultations, we found out that we can divide a set of organizations into five different co-voting communities, depending on the consultation participation.

A response network depicting 5 co-voting communities (Sluban, Mikac, et al. 2018)

By studying the answers to the consultations, we could further split up each co-voting community to its subcommunities, based on the response similarity. For instance: the community which organizations participate in consultation on Corporate Tax Transparency was divided in to three subcommunities. Two of them comprise organizations with almost directly opposing responses to consultations. In the first we observe opposition to the tax transparency, whereas the second argues for responsible taxation wherever enterprises make profit. The specific question that highlights these differences is whether there is a risk that tax transparency towards the public carries unintended negative consequences.

During the registration in the Transparency Register, an organization describes itself, its goals and main activities. We tried to match their responses from declared interests (self descriptions) to their manifest ones (answers to the consultations). Unsurprisingly, we did not find any significant matching.

 

Tag clouds are clusters of self-described goals and activities of the lobby organizations (Sluban, Mikac, et al. 2018)

 

A Sankey diagram linking co-voting communities to consultations (Sluban, Mikac, et al. 2018)

We’ve had fun with this, and so should you — towards this goal, we’ve created a web application Lobby Profile Explorer, where you can interactively navigate lobby network and explore/compare organizations themselves.

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