By Archit Puri, Nicole Almeida and Aayush Makharia
As soon as the term lobbying is mentioned, it is not hard to muster up images of an evening filled with glamorous parties and smoke-filled backroom politicking where interested parties and government officials engage in quid pro quo transactions of money for policy. The term ‘lobbying’ in India is misconceptualized and is often perceived as buying policy. It is considered taboo in corporate circles, and is replaced with benign phrases such as ‘government communications management’. Even a Private Members Bill introduced in 2015, defined lobbying as ‘communication with payment’. Payments to public servants amount to corruption and are punishable by law under the Prevention of Corruption Act, 2015 and thus must never be made legitimate. ‘Lobbying’ originates from the word ‘lobby’, where interest groups would meet parliamentarians before, after or in between parliamentary sessions to pitch their side of the argument or push for policies that will benefit their interest group. Lobbying is a transfer of information, the art of persuasion, the constant contact and relationship building to push a policy maker for policies that benefit the lobbyist.
Why do we need lobbying?
Given a country as diverse as ours, it is natural to have a number of interest groups, from corporates to NGOs to public relations and consultancy firms who lobby for various policies. Lobbying — though escapes the public eye due to lack of regulation. No wonder it was controversial when Walmart disclosed the amount spent on lobbying US policy makers on businesses in foreign countries including India under the Disclosure of Lobbying Activities Act, 1995 of the US. The Radia tapes controversy shocked many, with the exposure bringing out the concept of lobbying into the public domain. In order to make this already existing system transparent, it is important to regulate lobbying. Citizens can then keep a check on the policies being lobbied (for and against), as policies affect everyone — directly or indirectly.
A regulatory overview with basic features such as the definition a lobbyist and lobbying activities, registration of the lobbyist with an independent body along with compulsory disclosure by both the lobbyist and the official being lobbied to this authority. A public website must be maintained and updated by this independent body which would reveal details of lobbyists, the lobbied party and polices being lobbied. Lobbying activities must include activities that are done to influence policies, appointments, government schemes by private communication and must not include communication that takes place in public through print or digital media to influence polices. On the other hand research work done for the government by an external organization, which is a key part of policy formation does not have to be dubbed as ‘lobbying’. It is integral to define lobbyist and lobbying activities so as to not leave out loose ends and loopholes. For example, in Australia is lobbyist is defined as a person, company or organisation who conduct lobbying activities on behalf of a third party client. This definition does not include those lobbying for themselves. Thus, many companies, non-for-profit organisations and associations have in-house lobbyists escaping the law.
How is it going to help?
Citizens can participate in the process of policy making. Lobbyists can stand for the concerns of citizens who do not have the opportunity or access to represent them personally to the government. The process of influencing government policy making and details of the various interests that guide it is completely opaque. This should be open to 1.3 billion citizens of the country to scrutinise. Regulating lobbying, ensuring disclosure of lobbying activities and access to an online database with the details of lobbyists as well polices being lobbied for would help citizens understand which stakeholders are being favoured by the policy maker. Thus, ensuring transparency along with information symmetry between policy makers and citizens can lead to greater awareness and participation of the public. Bringing a policy issue out in the open, lobbyists will present research and factual evidence on an issue, and then try and nudge the government into action.
How will it change indian politics?
As Thomas Jefferson said, “Information is the currency of Democracy”. Lobbyists would bring nuanced expertise and knowledge to the table as the issue they lobby for is their sole interest and the very reason for their employment. Policy decisions backed up by sophisticated research are likely to benefit the citizens. The transparency is also likely to provide an impetus to policy debates in the public domain. Coupled with reforms in political funding (banning cash donations), regulated lobbying practices in the country could possibly reduce corruption. Before taking political funding from organisations in exchange of policy favouritism, policy makers would be wary of massive media scrutiny in today’s ‘fishbowl media world’. Such exchanges would become public through disclosure norms and create significant drops in voter confidence. All of which could lead to potentially reducing crony clientism in the government.
Public choice theory argues that more lobbying in a country will lead to large industries such as telecom and sugar strengthening their control over the government thus giving impetus to rent seeking behaviour and monopolies in these industries; but a more transparent lobbying system would create a situation called the Tullock paradox, named after public choice economist Gordon Tullock. This would mean that low cost of lobbying activities would lead to a dilution effect where if one interest group achieves an attractive rent seeking opportunity offering high profits, one can expect other groups to pursue it too, thus reducing the value of that privilege. There will also be crowing out of interest groups to the fact that if there are too many lobbyists seeking a favour, their individual voices may be less persuasive. Hence, the idea that government privileges would remain in a few hands might be overstated.
There are likely to be major implementation problems while regulating lobbying, and it might not guarantee equal government access due to the variations in time and money spent on lobbying by numerous interest groups, but with the right regulations based on the tenet of transparency, lobbying can be the means for India to move towards a more participatory democracy.
Archit Puri, Nicole Almeida and Aayush Makharia are Post-Graduate Students of Economics and Public Policy at the Meghnad Desai Academy of Economics.
This article was originally published on Spontaneous Order.
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