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Information about the project

Name of the project:

Impact of Transparency of Lobbying on Democratization and Its Consequences

Grant recipient

Technical University of Liberec, Economic Faculty

Studentská 2, Liberec. IČO 46747885

Head of the project:

Project coordinator 

Šárka Laboutková, associate professor 

Abstract of the project:

The project deals with the current, as yet unsolved problem of transparency of lobbying. In the current theories and prevalent models that deal with lobbying activities, there is no reflection of the degree of transparency of lobbying, mainly due to the unclear distinction between corruption, lobbying in general, and transparent lobbying. It is important to stress the transparency in association with the phenomenon of corruption and ask the question: under what circumstances can transparency be an effective tool in reducing corruption and improving the institutional quality? The project therefore aims to 1) identify objective methods for measuring transparency of lobbying through the study of factors that contribute to the transparency of lobbying, 2) prove the positive impact of lobbying transparency on the democratization process and civil society, and on decision-making processes in relation to the efficient allocation of public funds, and 3) quantify the impact of transparent or non-transparent lobbying on institutional quality, economic performance and competitiveness.

Grant provider:

Project code:

GA16-08786S

Key words:

Lobbying; Transparency; Democratization; Institutions; Corruption; Public Choice; Regulation; Civil

Society; Information; Efficiency; Public Sector; Interest Groups; Decision-making Process; Governance;

New Institutional Economics.

Duration of the project:

1. 1. 2016 – 31. 12. 2018

Total budget:

1 929 000 CZK

WWW:

http://vyzkum.ef.tul.cz/GA16-08786S/

Project description

Outcomes

Team

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Progress reports

Šárka Laboutková (applicant) – She focuses on the theory of impact of non-economic factors on economic policy decision-making, lobbying, corruption, and institutional quality; she is a co-author of the first Czech comprehensive publication on lobbying. She will guarantee the consistency of the empirical and interpretative framework of the research and the interpretative productivity of the research findings. She will contribute to the qualitative research.

e-mail: sarka.laboutkova@tul.cz

Vít Šimral (co-investigator) – His professional interest lies in the area of good governance. He worked and published on the topics of political finances and regulatory regimes. Outside of the academia, he worked as an analyst for Transparency International in Vienna and as an analyst and a lobbyist for the Reconstruction of State coalition in Prague. He will guarantee the theoretical grounding of the project within the tenets of political science and contribute to the qualitative research.

e-mail: vit.simral@gmail.com

Milan Žák (co-investigator) – He has long-term focused on the political and economic aspects of economic development, in particular with regard to the quality of governance and decision-making processes. He is an editor of CES VSEM Yearbook on competitiveness and institutional quality. He will be responsible for the methodology of the research, qualitative research and the application of its theoretical conclusions on institutional quality.

e-mail: milan.zak@vsem.cz

Pavla Bednářová (co-investigator) – She continuously deals with theoretical microeconomics, changes in the microeconomic environment induced by globalization and integration processes. Among other publications, she is a co-author of Advanced Microeconomics. She will be responsible for construction of the theoretical models and the cost-effectiveness analysis.

e-mail: pavla.bednarova@tul.cz

Miloš Fišar (co-investigator) – He deals with application of statistical and econometrical methods in economics and world economy. He will be responsible for the laboratory experiments and quantitative outcomes of the project.

e-mail: milos.fisar@econ.muni.cz

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Work progress in solving the grant project and achieved partial results

2017

As a starting point of our research was to identified main problems with transparent lobbying that can be briefly summarized in the following two points: 1) a real reluctance of political representation to enforce statutory regulation; and 2) a sole regulation by law is not a magic bullet (problems with definition, subjects, incentives, sanctions). There is however a number of factors (besides regulation) that contribute to the transparency of lobbying.

Dr. Šimral focused primarily on the refinement of his game-theoretical model of transparent and non-transparent lobbying. The first results of his work were presented at the Liberec Economic Forum (LEF) and the XXIX Annual Conference of SIEP (SIEP). The paper submitted for review to the scientific journal Journal of Public Affairs (Jsc) argues that European countries have still not managed to arrive at a useful definition of lobbying, which considerable hinders their pro-transparency regulatory efforts. It also looks at anti-corruption legislation in Europe and its link to lobbying rules. The evidence shows that the level of corruption is not significantly affected by the presence of lobbying regulation; this should be addressed by future regulatory efforts. 

For the description and analysis of lobbying rules and practices (and further also for the reforms and/or any new regulation) a new and more comprehensive methodology reflecting the relations/interactions between 'actors of influence' and 'public office holders' has to be developed. For this reason, doc. Laboutková in co-operation with dr. Vymětal  has combined various forms of rules that take into account the broader problem of the decision-making process that are framed by the challenging principle of transparency. This year we have focused on a contextual analysis of rules and measures that offers both a broad as well as comprehensive view of the required transparency of lobbying activities and the environment in which decisions are made. In this regard, focusing on the sunshine principles/rules (not purely limited to laws) provides a grasp of the whole issue in a broader context. The conclusions were presented at the International Conference: Economic Policy in the Global Environment, and the results were published in article by scientific journal DANUBE: Low and Economics Review (Jsc). The final study submitted for review to the scientific journal Journal of Public Policy (Jimp) provides the framework for a new way to evaluate the lobbying transparency as well as defines the link between transparency of lobbying and institutional quality more in depth. As a result, we have proposed a catalogue for evaluating the lobbying transparency and divide all measure into four categories – lobbyists; targets of lobbying; sunshine rules; and monitoring and sanctioning – providing 159 indicators in total.
Simultaneously doc. Laboutková identified the connection between transparent lobbying and quality of democracy, highlighted the common elements and stressed the importance of influence of transparency in lobbying on already existing measures of quality of democracy. The results were presented at the LEF and SIEP.
Ing. Fišar has been working on the design of the laboratory experiment all last year to verified the theoretical construct. He presented individual steps at domestic and foreign conferences. The pilot testing of the new design has shown the complexity of the decision-making process and the misunderstanding of the subjects, which is the reason for currently complex evaluation and redefinition of the design of the experiment.
Prof. Žák provided an empirical study focused on transparency in lobbying as perceived by in sample organisations in the Czech Republic. Data for the study was gathered from a sample of business institutions in the Czech Republic. The partial results of the questionnaire survey were introduced in conference paper and the conclusion that regulations aimed at legitimizing lobbying are seen as having a positive impact on democracy was published in scientific journal Review of Economic Perspectives – Národohospodářský obzor (Jsc).
Doc. Bednářová focused on identifying the costs associated with transparent lobbying. The used CBA method was specified on the basis of the delimitation of characteristics and attributes of transparent lobbying. The basic variants of the final states were determined as the current legislation (status-quo), lobbying transparency increased by legislation changes or lobbying transparency increased on the basis of self-regulation principles. Comparison of the defined variants was presented at the conferences LEF and SIEP. More robust conclusions with incorporated comments are introduced in the article submitted for review to the scientific journal Journal of International Studies (Jsc).

Brief information about the progress and results of business trips abroad

  • ESA, San Diego, USA/Vienna, Austria, Fišar (06 and 09/17)
The World Science Conference, the Economic Science Association, took place in San Diego in June 2017, the conference represents a summit in the field of experimental economics. The ESA European meeting took place in September 2017 in Vienna. Ing. Fišar presented the results of a pilot study of the economic experiment and, on the basis of feedback and consultation, revised the design of the experiment.
  • SIEP, Catania, Italy, laboutková, Bednářová, Šimral, Fišar (09/17)
Doc. Laboutková, doc. Bednářová, dr. Šimral and Ing. Fišar attended the 29th Annual Conference of the Italian Society of Public Economics (SIEP). They presented their working papers in a common panel, which was critically acclaimed by other participants. All present members of the research also became members of the Italian Society of Public Economics.

2016

In the first year of the project it was necessary to complete the design of the research plan as a first step. Four main research areas have been identified.  They are interconnected and complementary.

1) to test the primary hypothesis about the relationship between the transparency of lobbying and democratization

First, it was necessary to create a comprehensive catalogue of key measures of transparent lobbying. The first proposal of the basic set of key measures was introduced as a presentation "The Elements of  Transparent Lobbying" (Laboutková, Vymětal) at the CEPSA international conference in Ljubljana in June and as a conference contribution by Laboutková, Vymětal "Measures of transparent lobbying: how to approach it and evaluate it – a preliminary stage" (Current Trends in Public Sector Research, Šlapanice by Brno, forthcoming).  The received comments were incorporated into a significantly more detailed article ,,Investigation into Key Elements of Transparent Lobbying" (Laboutková, Vymětal) which has been submitted for review to the scientific journal Public Policy and Administration (Jsc).

Simultaneously the dataset for comparative analyses of legal regulation started to be created as a preparation of an analytical model. The outcomes of this research phase were in the first draft of the paper "Regulating Lobbying in Europe: No Model Fits All" (Šimral), which was presented at two international conferences during 2016 (CEFRES Prague in May, CEPSA Ljubljana in June). The paper has been submitted for a review for a special edited volume of the Czech Sociological Review (Jimp). The volume should be launched in spring 2018.

Transparency and the scope of civil and economic liberties are crucial factors influencing institutional quality and therefore democratization. A connection between opaque lobbying and competitiveness through indicators of economic freedom, which are negatively affected by the consequences of non-transparent  lobbying, was identified. In this context, the relationship between competitiveness and economic freedom has been empirically tested in an already published article "The Potential Effect of Non-transparent Lobbying on Competitiveness through Economic Freedom in the EU – an Empirical Survey" (Laboutková, Staňková) in Scientific Papers of the University of Pardubice, Series D (Jsc).

One of the sub-parts of the research was focused on open government data that has been identified as one of the sunlight principles of lobbying transparency key measures. This issue was the subject of a draft  "Open Government Partnership: Unutilized Potential? (Case of the CzechRepublic)" introduced by doc. Laboutková at the World Political Science Congress (IPSA Poznań in July). Based on the feedback the paper has been edited and completed for consideration by the scientific journal Innovation: The European Journal of Social Science Research (Jimp).

2) to create a model of influence in decision-making based on  the three regimes of lobbying (transparent, non-transparent, none)

The formulation of the basic starting point of a relationship model is based on a simple scheme: interests – the decision maker – the outcomes. The aim was to study the links among government, lobbyists, businesses, and citizens in terms of information flows and to design a preliminary model of such links and identify possible consequences. This model and the consequences resulting from three hypothetical situations of lobbying – none/non-transparent/transparent – was introduced by Laboutková  and Žák in conference paper "Transparency of lobbying: a theoretical approach" (XIV International Scientific Conference on Economic Policy in the EU Member Countries, Petrovice, September). The theoretical construct will be verified in an experiment in the next steps of the research (see bullet 3) and qualitative research based on a questionnaire survey. A pilot questionnaire focused on lobbyists and lobbied in the EU structures has already been created (Laboutková, Žák). It is now in the process of consultation with selected practitioners.

Prof. Žák also focused on the regulation and supervision of an independent enforcement system of transparency – a spontaneous behavior. it has been demonstrated that transparency is inherent in a spontaneous market system and its regulation and supervision set up just rules. These conclusions were presented at conferences (Entrepreneurship and Innovation, Prešov, April; SEEPS, Praha, May) entitled "Markets, Interests, the Information or the Lobby as a Problem of Economic Theory".

3) an experiment

The laboratory experiment on effects of lobbying (none/non-transparent/transparent) on decision making is being prepared and is expected to be tested in first quarter of 2017. Ing. Fišar cooperates on the preparation of the laboratory experiment not only with the project team, but also with researchers James Tremewan (University of Vienna) and Melis Kartal (WU Vienna).

4) identification of costs and benefits of transparency on lobbying

During the first year's investigation dr. Bednarova conducted an extensive research of both domestic and foreign literature related to the issue of public sector and public projects. The proposal to change the system of allocation of public resources might be regarded as a public project as well, thereby increasing the transparency of lobbying can be characterized as a specific public project. From the perspective of public projects, traditional static indicators (assessed as unsuitable for use as part of research project) and advanced dynamic indicators that analyse the costs (inputs) project and apply them to its benefits (foreground), were reflected.

Brief information about the progress and results of business trips abroad

  • ESA, Bergen, Norway, Fišar (08-09/16)

The Economic Science Association is a leading research society of experimental economics. The meetings are usually attended by leading researchers in the field. Ing. Fišar presented a work in progress "Investigation of Lobbying Strategies in Laboratory" and received  valuable feedback there. The work was then transformed to a publication for a conference called Current Trends of Public Sector research by Fišar, Špalek, Urbanová: "Ex-ante targeting of lobbying strategies"

  • CEPSA, Ljubljana, Slovenia, Laboutková, Šimral (03 – 04/06/16)

The CEPSA conference in Ljubljana in June was a success. Two members of the project team, doc. Laboutková and dr. Šimral, led the panel titled ,,Lobbying Political Leaders: Qui Bono", where they presented two papers. In addition to thought-provoking discussions about the possibility of lobbying regulation and transparency of the decision-making process, new relationships were established with other colleagues from abroad and valuable insight was gained into several other international research projects on lobbying and interest groups.

  • IPSA, Poznań, Poland, Laboutková (23 – 28/07/16)

The 24th IPSA World Congress of Political Science drew 2,587 participants from 92 countries to share their research and discussed the main theme of the Congress. Doc. Laboutková presented conclusions on the role of open government data in enhancing transparent decision making and demonstrated a practical use of the OGP initiative using the example of the CzechRepublic. She received valuable feedback, incorporated it and submitted the article for consideration by the scientific journal Innovation: The European Journal of Social Science Research (Jimp).

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