1.1 The Recent Growth of Regulation and the Lobbying Industry
In the last four decades, lobbying has become a universally acknowledged political and economic activity in Europe, North America, and elsewhere. Lobbyists are now an accepted part of liberal democratic political systems.
The acknowledgment of lobbying as a legitimate professional field derives mainly from its real-world usefulness. Lobbyists have their value both for people outside of governing bodies, as they voice the people’s concerns to the government, as well as for elected representatives, for whom they supply expert information and knowledge. There is also a growing consensus among politicians and practitioners of lobbying as well as among academic experts that, to ensure democracy legitimacy, lobbying must be regulated. For instance, the legal scholar Johnson argues that rules governing lobbyists should ensure (1) that all persons have a fair opportunity to be heard by the government, (2) that the government enjoys the confidence of the people, (3) that official decisions are based on accurate information, (4) that the citizenry knows how the government operates, and (5) that the performance of public business benefits from the wisdom of the community (Johnson 2006, pp. 13–14).
The United States has been developing its lobbying regulations since the nineteenth century. Already in the 1850s, the House of Representatives in Washington felt the need to protect itself from the influx of lobbyists pushing forward the agendas of various interest groups (Schlozman and Tierney 1986, p. 318). Despite that, all attempts to pass a lobbying law at the federal level were unsuccessful and it was only in 1938 that the first, partial regulation was adopted as the Foreign Agents Registration Act. The first general lobbying law came after Second World War: the Federal Regulation Lobbying Act as a part of the broader regulation Legislative Reorganization Act of 1946.
At the state level, the attempts at regulation followed a similar, gradual path of progress that culminated in the 1940s. In 1953, the legislatures of 29 US states and the territory of Alaska featured a mandatory lobbyists’ register (Zeller 1954, p. 217). After the Watergate scandal, the remaining states also chose to adopt these registers and other lobbying regulations and in 1988, Arkansas was the last US state to adopt a state lobbying law (Blair 1988).
In other countries, regulations are being adopted only in the course of the last three decades. The adoption of these regulations is accompanied by a renewed interest in the subject; researchers can finally compare the long-standing US lobbying regulation with the new measures discussed and adopted elsewhere.
After the adoption of the 1946 Federal Regulation of Lobbying Act in the USA, there was a hiatus of four decades before other countries also started to consider adopting similar law in their own legal frameworks. In 1989, Canada followed suit with its southern neighbor and adopted the Lobbyists Registration Act. Between 1983 and 1996, Australia attempted to run a voluntary register of lobbyists at the federal level, which, however, proved ineffective and was abolished.
In Europe, the first regulation that indirectly regulated some lobbying activities appeared in 1951 in Germany. Interest groups, formally “associations”, were invited to official hearings, or rather sector-based committees, in the Bundestag (Rule 73, Rules of Procedure of the Bundestag). The first laws specifically aimed at lobbying were adopted in the post-communist countries of Georgia (1998) and Lithuania (2000). In the speed of adoption of lobbying laws, individual European countries were in fact beaten by the European Parliament, who already, in 1996, introduced a regulation of lobbyists into their Rules of Procedure (Rule 9(2)). At the national level in Europe, the trend to adopt separate lobbying laws started only after 2000; 11 more European countries would, between 2001 and 2017, join Georgia and Lithuania in adopting such rules.
These national lobbying laws significantly vary in several aspects: the goals they want to achieve, the scope of the activities they regulate, the scope of regulated actors, or the duties they put on these actors. The final form of these laws is always the result of a political compromise, and thus the effectiveness of the rules also varies.
While regulators are attempting to properly regulate lobbying, the simple fact is that reality does not wait for them and the volume of lobbying around the globe does not shrink. In 2018, the amount officially spent on lobbying in just the United States reached the sum of $3.42 billion, thus hitting an eight-year high since the all-time peak in 2010 (Opensecrets.org 2019). In the European Union, the official amount is unknown, since the regulation does not include financial disclosure, but the sum is estimated to reach $2 billion (Politico 2017). The number of lobbyists registered in the EU Transparency register is constantly rising (Europa.eu 2019). There is a lack of official data from other countries; at the same time, there is no reason to doubt that lobbying activities, their intensity, number of agents, and spending sums are growing globally.
Moreover, official lobbying is only the tip of the iceberg; there is also “dark money” flowing into politics from unreported links with private businesses. In the United States, the most widely used tools for undisclosed financial influence are political non-profit organizations and super political action committees (super PACs). Given the nature of dark money, the aggregate sum is next to impossible to estimate, but conservative estimates in the United States reach, in election years, the milestone of $1 billion (MarketWatch 2018).
In other words, there has been a global rise in the amount and intensity of lobbying activities carried out in the democratic world. It is truly difficult to show exact numbers, but even conservatives estimates reach billions that are being spent every year on funding the lobbying industry in the two most democratic continents in the world: North America and Europe. The same or even higher amounts are probably spent on lobbying that is happening outside of the scope of regulation—both in countries which do not regulate lobbying at all as well as in the gray areas of law in the countries where lobbying is already regulated. And it is the connection of lobbying to liberal democracy that is crucial for understanding the crucial importance of lobbying rules in advanced democratic societies.
1.2 How is Lobbying Connected to Democracy?
For their proper functioning, modern advanced democracies need to fulfill and constantly improve on several requirements; one of them is free and open access to the government for everyone. Today, regulated lobbying is a recognized, legitimate point of access and an activity necessary for quality decision-making. Lobbying helps politicians to deliver adequate policies; it enables participation in the decision-making process and is a tool for the provision of information. De facto, it is a constant interaction between all stakeholders, based on a formalized consultation process or within informal contacts and human relations.
That being said, in practice, some individuals or organizations often have greater and better access to policy-makers than others. The reasons for this disparity vary; the evidence, however, suggests that there is a strong correlation between access and economic power (Dahl 1961; Salamon and Siegfried 1977, etc.). There are many invisible stakeholders in society that are difficult to organize for collective action. In a proper democracy, all their interests must be taken into an account. The power of private actors, their role in political acts, and the balance between individual interests and the public good is a central question of democratic theory. Democracy means balance of interests.
This approach is based primarily on the theoretical assumptions of liberalism, which place particular emphasis on individual freedom. Social scientists have looked at the freedom of the individual, equality with others, and the legitimacy of individual or group interests in different ways. The most important are undoubtedly the representatives of European liberalism of the seventeenth and eighteenth centuries, which formulated the ideological basis of modern democracy. The call for state authority was primarily the result of the political theory of Thomas Hobbes (1588–1679) and Jean Jacques Rousseau (1712–1755), although their initial assumptions are quite different (Klokočka 1991, p. 21).
Hobbes was characterized by skepticism of interest clashes, and he formulated his pessimism about human nature, often with the reminiscence of the “man of the wolf”. He considered particular interests to be extremely egoistic and basically directed against a sovereign people. Hobbes did not believe that confrontation of interests could result in some beneficial solutions. The inequality of individual forces and interests, their egoism and “overgrowth of pluralism”, which is negatively reflected in the process of creating the state will, was replaced by Hobbes with a strong state authority (Hobbes 1651). Hobbes believed that the state could rule impartially over society.
Rousseau, on the other hand, had an optimistic view of human nature and believed in man as an individual who, by his own volition, based on an active exchange of opinions and social attitudes, was able to free himself from his egoistic interests and came to the knowledge of the common good. While the state was the guarantor of morality for Hobbes, it represented a rogue of the natural order for Rousseau. He found the starting point in the fiscal conclusion of the so-called social contract, which generates the enforcement of the general will by integrating the will of all individual members of society (Rousseau 1755).
However, John Locke’s liberal dem...
