The Strengths of Lobbying. How Lobbying Influences the Legitimacy of the European Union

Table of Contents

1. Introduction

2. Definitions of key concepts
2.1. Legitimacy and the EU
2.2. Lobbying and the EU

3. Responsible lobbying

4. Lobbying and legitimacy
4.1. Responsible lobbying and legitimacy
4.2. Irresponsible lobbying and legitimacy

5. Conclusion

Appendix

Bibliography

1. Introduction

Over the past 20 years, the number of lobbyists in Brussels increased rapidly. The Lisbon treaty of 2009 reinforced this effect drastically as EU institutions became more powerful. Consequently, there was a shift in the lobbying strategy of many interest groups increasingly focusing on EU decision makers instead of state governments (Chalmers, 2012). In 2017, approximately 15,000 lobbyists were positioned in Brussels (Neuhold, 2019). The rising trend of lobbying in the EU has several effects on policy and decision making of EU institutions. The European Union finds itself in a challenging position due to the rise of Eurosceptic parties, problems with European integration, the economic crisis, and the overall concern about the democratic legitimacy of the EU (e.g., Kriesi, 2016; Copsey, 2015). Legitimacy as a concept describes the rightfulness of a government in terms of either doing the right thing in the right way with the right people or in terms of political sciences as the overall belief of society in the rightness of the system (Parkinson, 2019). The legitimacy of the EU is debatable, and lobbying is on a rising trend. Therefore, this paper addresses the following research question: Does lobbying facilitates or impedes EU's legitimacy?

Firstly, the paper focuses on the definitions of the key concepts and links them to the EU. Secondly, responsible lobbying will be discussed. Additionally, the paper will investigate the relationship between lobbying in the EU and legitimacy more in depth, by using my own framework, while considering several dimensions and scales of lobbying and by citing multiple examples. Lastly, a conclusion will be given.

2. Definitions of key concepts

2.1. Legitimacy and the EU

Legitimacy is a controversial topic that has many different definitions. In this paper legitimacy will be defined as doing the right things in the right way by the right people, linking together the substance, procedure and source (Parkinson, 2019). In addition, Parkinson (2019) also considered the general view of political sciences on legitimacy, which describe it as the beliefs of the people, measured in how much citizens trust their government. This concept is specified by the work of Copsey (2015) and Schmidt (2013) who define legitimacy in three different aspects: Input, Output and Throughput legitimacy. Input legitimacy describes legitimacy which arises through participation of people and can be enhanced by more people taking part in the decision-making process (Schmidt, 2013). Output legitimacy describes the outcome and is the legitimacy through performance, or how effective solutions are for the overall society (Copsey, 2015). Throughput legitimacy focuses on the how, it concerns the process and how decisions were made (Schmidt, 2013). These different types of legitimacy underline the diverse aspects of this topic.

After defining the different types of legitimacy, these concepts can be related to the EU while investigating its legitimacy. Copsey (2015) states in his proposal that the EU is a system which has formal legitimacy, but this does not mean that the EU also has social legitimacy. This relates to the definition of political sciences which view a government only as legitimate if people believe it is legitimate (Parkinson, 2019).

The important institutions for EU's decision making and legislating are the European Commission, the European Parliament and the Council of Ministers. The European Parliament enjoys high input legitimacy as it is directly elected by the people living in the different EU countries (Neuhold, 2019). The Council of Ministers, that represents the interest of the member states, also enjoys input legitimacy as the minsters are indirectly elected by the national population (Parkinson, 2019). The European Commission is an independent and supranational institution and does not enjoy high input legitimacy, as the commissioners are only approved by the European Parliament and only the president of the European Commission is elected by an absolute majority voting in the European Parliament (Neuhold, 2019). This reduces the input legitimacy of the European Commission and makes it the most problematic institution as it is hard for EU citizens to influence.

2.2. Lobbying and the EU

Lobbying is the "communication of politically relevant information [...] to those political actors who have the power to substantially influence public policy outcomes in that policy-making environment. "(Anastasiadis et al., 2018, p. 208). Lobbying can be used by multiple actors, ranging from corporations to NGO's and consumer unions. European lobbying changed substantilly during the last 50 years and adapted itself to the structure of the EU. Nowadays, lobbying mainly takes place in a form of transversal lobbying which describes that different interest groups form an alliance around a common project and approach the EU with a ready-made consenus (Guéguen, 2007). In the past, lobbying was strongly based on big corpoations, whereas currently NGO's and consumer unions are percieved as increasingly important by European politicians (Guéguen, 2007). Politicians in the EU also require information as a critical resource for their decision making (Hillman & Hitt, 1999).

The EU faces several problems with its political and European integration, and it is a mayor threat for the EU to keep a joint action in the management of global challenges (Magone, 2019). Roderik (2011) states that the EU is in a fundamental trilemma in which they have to balance out hyper globalization, the nation states, and democratic supranational politics. They are trapped between the three nodes and always need to ignore at least one of them (Rodrik, 2011). The process of political unification on a European level leads to several costs as different cultures with different norms, languages, and identities all have the same supranational laws (Spolaore, 2013). Consequently, the importance of individual voices is reduced, as laws become supranational and do nottake into consideration informal institutions. This development calls for ways in which interest groups can still influence policy making. The input legitimacy will be reduced by the process of political unification but can then be enhanced by the participation of interest groups in the decision-making process.

Lobbyist have several access points to the EU decision making institutions and therefore to the ordinary legislative procedure (OLP). The OLP describes the process of creating and implementing new legislations. The process starts with a proposal of the European Commission. This proposal is then negotiated and amended in trialogues of by a rapporteur and shadow rapporteurs. After that the proposal needs to pass a voting in the European Parliament, and then in the Council of Ministers. Afterwards it will be implemented. Powerful interest groups have access points at all stages of the OLP and can therefore influence this process (Neuhold, 2019). Therefore, lobbying has an important position in the EU.

3. Responsible lobbying

It is imporant to conisder that there are different ways of lobbying as it can be done in a responsible or in an irresponsible way. Interest groups need to pay attention to four components to achieve responsible lobbying: content, process, organization and environment. They need to focus on a social good cause (content), work in an ethical way (process), be respectful to the political process and integrate lobbying into the firm (organization), and create a responsible context of lobbying (environment) (Anastasiadis et al., 2018). In order to achieve responsible lobbying, interest groups need to be transparent about their activities (Lyon, et al., 2018). Another aspect of responsible lobbying is the self-regulation as a form of voluntary commitment by a firm that can be manifested in a firm's code of conduct (Anastasiadis et al., 2018). Furthermore, it is beneficial to implement an independent rating agency which monitors firms political activates and publishes public availably ratings based on responsible corporate lobbying criteria. (Lyon, et al., 2018).

Above discussion covered the practical view on how to achieve responsible lobbying. However, it is also important to consider the normative view. Ethical frameworks focus on the act of lobbying and describe which ethical standards firms should follow when they engage in lobbying activities (Anastasiadis et al., 2018). This can be linked to the self-regulation as ethical values are a crucial part of a code of conduct. Responsible lobbying can be achieved if interest groups take all different dimensions into account (social, ethical, environmental etc.) and are then transparent about their activities while guided by an ethical code of conduct (Figure 1).

4. Lobbying and legitimacy

4.1. Responsible lobbyingand legitimacy

Lobbying is a crucial component of the policy making in the EU. Bouwen (2002) states that the EU has a demand for access goods for their own functioning and that the interest groups need to supply this access goods to gain access to the EU institutions. This increases input legitimacy as the participation of people increases, illustrated by Figure 1. It also enhances output legitimacy as the EU institutions are able to achieve better solutions and gain insights into certain problems from expert knowledge (Bouwen, 2002). The Case of Michelin's Green tires is an excellent example to describe these effects. The development of green tires is a crucial factor to decrease the carbon emissions of cars. Michelin did a lot of R&D on this topic and was consequently able to lobby for an international grading system on tires (Hanoteau, 2009). They were able to enhance the input legitimacy by pushing topics which are relevant for society on the political agenda and then enhanced the results by providing expert knowledge to the political institutions. This describes the basic effect responsible lobbying has on legitimacy on the EU.

This process can be specified by looking at how lobbyists interact with the different levels of the EU decision making. To illustrate, the case of the lobbying process from eBay for taxation in ecommerce will be used. The case revolves around the fact that when a company sells a product online it charges the value-added tax (VAT) rate of its own country. However, the EU wanted to change this policy so that the company should charge the VAT rate of the country where the customer is from instead (Laurinkari, 2018). This would lead to a fair distribution of the VAT rate charges.

The three institutions in the EU decision-making process demand different access goods from interest groups to improve their own functioning. The European Commission requires expert knowledge to formulate a good proposal (Bouwen, 2002). After a proposal has been formulated it will be passed over to the European Parliament, where the parliament votes on it. The parliament needs to take into account the views of the EU citizens and therefore requires mostly information about the European encompassing interests, which are represented by large European associations (Bouwen, 2002). After the proposal passes the parliament, the Council of Ministers vote on it. They require information about the domestic encompassing interest, which are represent of national associations (Bouwen, 2002) as their main interest are the national interest.

In the case at hand, eBay talked first to the European Commission to help them to gain more insights about the effect a proposal like this has on small businesses in Europe (Laurinkari, 2018). When the proposal was passed to the European Parliament, they changed their strategy and partnered up with large trade unions and think tanks in order to show the European wide implications of this policy change. With their cooperation, they showed that this implementation may be good for larger corporations but is disastrous for small business as they would have to deal with over 300 different VAT rates for different products in 27/ (28) different countries. This would imply a huge effort forthem and would make European wide ecommerce for small business unappealing (Laurinkari, 2018). However, the European Parliament is in general not very important for polices regarding taxes as the power for tax regulation lays in the Council of Ministers (Laurinkari, 2018). Therefore, eBay focused to lobby the national ministers of finance and their officials. They did so by travelling to 18 members states and meeting the ministers in person (Laurinkari, 2018). Moreover, eBay made use of an online petition were thousands of European small businesses signed up to express their concerns (Laurinkari, 2018). Additionally, they sought the cooperation of national associations. eBay lobbied in this case for their customers being small businesses, which are crucial for the European economy. They engaged in responsible lobbying to show the political institutions the wide effects of this policy. Therefore, eBay contributed with their lobbying campaign to an enhancement ofthe democratic legitimacy of the EU. Nevertheless, despite spending many resources on this case, eBay was not able to influence the outcome and the Council of Ministers voted for the new taxation policy (Laurinkari, 2018). This illustrates that even though the lobbyists had several access points to the different institutions, they were not able to change the policy outcome. This in turn clearly shows that lobbyist do not have a say in the final decision making and the decision is only taken by democratically elected politicians.

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