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March 06, 2012

Lobbying and Lott's research

In "Our Corrupt Politics: It's Not All Money", Ezra Klein reviews two recent books, one by Jack Abramoff and the other by Lawrence Lesssig, on lobbying. Several interesting points:

--Until 1853 outright bribery of Congress was legal. After 1953 ". . . lobbyists realized that the law permitted them to pay congressmen 'consulting fees,' which they did until well into the twentieth century."

But I note that somehow the country survived.

--Klein states ". . . the typical lobbyist today plays an important, even crucial, part in the political system."

--Klein further states that, contrary to expectations, lobbying doesn't seem to buy votes: Instead "lobbyists act like a volunteer, and highly skilled, army for politicians who already agree with them."

--But, regardless, Klein is highly distrubed by all that lobbying going on. And he asserts that the American public is, too: ". . . the numbers are enormous, and unsettling. In fact, they are much more than unsettling. They are discrediting. Whether the reality is as corrupt as these figures suggest, most Americans believe it is as corrupt as these figures suggest."

--To the ramparts then! Let's remove this awful stain from our government! (I note, but Klein doesn't. that we have made ever-increasing attempts to control the "ethics" of our elected reperesentatives.) Well . . . not so fast: "Which is why it’s so damn difficult to actually kill off lobbying. Outlawing bribes is easy. Outlawing relationships isn’t."

You don't say. 

--Finally, even if we could reduce the influence of money--which Klein argues would be difficult--the effect probably wouldn't be large: "But it’s not clear that any set of campaign finance reforms or anti-lobbyist regulations would restore trust in government or ratchet down partisan polarization. . . . Which is to say that while moneyed interests are decisive in passing laws and influencing provisions that few Americans care about, they’re much weaker on the issues where Americans are actually watching."

Klein is no doubt sincere, just like the many other reformers who want to "take the money out of politics". But they've been trying for at least fifty years. It seems to me that the country has very, very little to show for those efforts.

Mr. Klein and the other folks who are desperately concerned about campaign financing and lobbying and undue influence and who harbor fantasies of a system that runs without the evil taint of money would benefit from reading two articles by John Lott.

1. "Do Campaign Donations Alter How a Politician Votes? Or, Do Donors Support Candidates Who Value the Same Things That They Do?" co-authored with Stephen G. Bronars, Journal of Law and Economics, October 1997, investigates "whether contributions alter how the politician votes or whether these contributions constitute support for like-minded individuals". Bronars and Lott perform a simple but clever test: how do Congressmen vote in their last terms? Answer: "While it is not possible for us to conclude that none of the congressmen ever sold their votes for donations, our estimates demonstrate a remarkable degree of stability in voting patterns over time, thus lending support to past work emphasizing that it is costly for ideological politicians to alter their positions."

But Klein, at least, seems to know this. Even more important, and something Klein doesn't indicate knowing, is a second article:

2. "A Simple Explanation for Why Campaign Expenditures Are Increasing: The Government Is Getting Bigger," Journal of Law and Economcs, October 2000. My inference from the article is that anybody who wants the money out of politics has only one reasonable way to proceed: make the government smaller and less powerful. Put differently: nobody spends a lot of time and money trying to influence the local government's dog catcher. John notes beautifully in the abstract, "The irony is that those who seem most concerned about the level of campaign expenditures are also frequently the ones who most strongly support increasing the size of government."

But, alas, shrinking the government will be difficult. For all the usually noted reasons, but also for a reason that John advances in an underappreciated article (co-authored with Gertrude M. Fremling): "Time-Dependent Information Costs, Price Controls, and Successive Intervention," Journal of Law, Economics, & Organization, Fall 1989. From the conclusion:

Economists from Hayek (1944) to Friedman (1962) have pointed to the phenomenon that government intervention often generates calls for even more government regulation. Using our discussion of the cost of relating events that occur more closely in time,  we have shown an example where under certain conditions it pays for politicians to create a problem. In the  case of price controls, buyers easily observe that controls prevent prices from rising, but find it  more  costly to  associate controls with the long-term resulting shortages and deteriorating quality. If voters face different costs for different types of information, the creation of a crisis can increase the attractiveness of subsequent transfers.

Comments

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JorgXMcKie

I don't usually read Klein, partly because it's obvious that he's writing about quite a lot of things he knows little or nothing about.

Joe R.

To the Left,the Right uses "lobbyists", i.e., underhanded corporate moneymen, engaging in activities in desperate need of curtailment.

Their side has "issue activists", merely exercising their rights to free speech, association and petition their representaives.

Maddog

It seems that the problem could be resolved through incentives which encourage even bad men to do the right thing (I hope I am paraphrasing Friedman fairly).

Perhaps returning the selection of Senators to the states as it was originally (limited to one 6 year term), overturning the income tax amendment and then requiring the federal government to create a budget which would be met by the states according to their census would be enough to rebalance the some of the power imbalances we have today.

The tension that would be created between Senators and Reps would be positive. The one term Senators would be much less influenced by lobbyist, States would have a role again in the federal fiscal scheme, which would allow for the question of just where (state or federal) expenditure should be made.

I have no idea if it would work but before the Senator and Income Tax amendments to the Constitution the fed budget was smaller than it is today.

There would be other benefits as well from campaign finance reform issues to government program reformation to entitlement reforms.

There appears to be no natural base for this "solution" so it is difficult to see it being enacted.

Just a thought.

Mark

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