Socially responsible lobbying

Abstract

Our paper analyzes lobbying contests in which firms can enhance their competitiveness in the eyes of a decision-maker and stakeholders through both traditional lobbying (e.g., political contributions and information campaigns) and responsible lobbying (e.g., sustainability programs and consumer advocacy). We establish that increasing demand for various Corporate Social Responsibility (CSR) investments can incentivize firms to shift from traditional to responsible lobbying. Harnessing CSR for lobbying purposes obfuscates firm comparisons for the decision-maker and stakeholders, thereby reducing the intensity of lobbying competition and lowering equilibrium lobbying expenditures. This reallocation is generally welfare-improving and could occur even when traditional lobbying is somewhat more cost-efficient than responsible lobbying. Our results suggest that a transition to responsible lobbying—a “pro-consumer lobbying agenda”—can represent a move toward a more efficient lobbying standard.