The lobbying economy is the mechanism through which the concentration of economic power translates into the concentration of political power. Its scale reflects the returns to political investment.
The Lobbying Architecture
The lobbying economy — the industry of professional advocacy through which corporations, trade associations, and other organised interests attempt to shape government policy — is a multi-billion-dollar annual enterprise in Washington and in every state capital. Its scale reflects the returns available to organisations that can influence the regulatory frameworks, the tax provisions, and the spending decisions that determine their operating environment. The corporation that invests in lobbying to obtain a favourable regulatory interpretation, a specific tax provision, or a government contract is making an investment whose expected return — measured in the value of the policy outcome sought — can be a hundred or a thousand times the lobbying investment. The lobbying economy exists because the returns to political investment are high relative to the costs.
The lobbying economy's governance consequences operate through the information asymmetry that professional lobbyists create. Legislators and their staffs cannot be experts in every policy domain on which they make decisions; they depend on the information that advocates provide. The advocate whose interest is served by a specific policy outcome and who provides well-crafted, credible information supporting that outcome has a structural advantage over the diffuse public whose interest would be served by the alternative outcome but who provides no equivalent organised information supply. The resulting policy bias toward organised interests over diffuse public interests is not primarily the product of corruption — it is the rational response of legislators to the information environment that the lobbying economy creates.
The lobbying economy is the institutional mechanism through which the concentration of economic resources is converted into the concentration of political influence. Its governance consequence is a policy-making process that is systematically more responsive to organised, well-resourced interests than to the diffuse public interests that democratic theory is supposed to serve. The gap between those two is the gap between what the lobbying economy produces and what democracy claims to promise.
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