When lobbying is legal

A wealth of studies show that despite the prolific financial contributions US lobbies make to elected officials and parties, money is not a guarantor of policy influence there. Rather the reputations that groups develop as providers of credible high-quality intelligence on policies is a significant source of lobbying influence. This lesson has been learned by interest organisations in comparable emerging markets such as China and Brazil. Business, trade, professional and labour organisations in these countries invest in the technical capacity of their organisations and, as a consequence, are able to develop reputations for serving as credible representatives of their members, trustworthy mediators by policymakers and, educators of the public and the political elites on the merits of policies. This allows them to leverage resources other than money — their expertise and reputations — to influence policy. However, with some notable exceptions such as the CII and FICCI, Indian associations rely heavily on providing legal and illegal donations of money to elected policymakers for influence.

A recent study (Yadav 2011) reveals the striking contrast with another emerging market struggling with many similar political and economic challenges — Brazil. Of 158 business, trade and professional organised interest groups surveyed in Brazil, about 73 per cent cited their technical ability on sectoral issues and 48 per cent their expertise on national policy issues as a source of strong or decisive lobbying influence with elected policymakers. In contrast, of 179 Indian groups, only 30 per cent cited their technical ability on sectoral issues and 23 per cent on national policy issues as a source of policy influence. In specific policy situations, 54 per cent, a majority of Brazilian groups, report using technical information rather than money to lobby policymakers while only 22 per cent of Indian groups could make this claim.

Instead, 37 per cent of Indian groups report the direct exchange of money for policy favours in these situations while less than 10 per cent of Brazilian groups reported the same. Technical information was the single most popular means of influence in Brazil while financial donations to parties and politicians were the most popular means of gaining influence in India. These numbers paint a damaging picture of the policymaking environment in India and unfortunately explain why India has yet to develop the rudiments of a regulatory framework for lobbying.

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