A Paradox of Political Reform: Shadow Interests in the U.S. States

Abstract

Laws that restrict and disclose the actions of lobbyists are attempts to protect elected officials from undue influence and preserve public trust in lawmaking processes. Imposing too many campaign finance restrictions and reporting requirements on registered interest groups, however, might discourage them from registering. I use an original data set compiled from several decades of lobbyist lists to determine whether these laws suppress registration rates among interest groups. More limits on campaign finance activities, but not heavier reporting burdens, are shown to be associated with depressed registration of interest groups. As unregistered interests are not subject to these regulations, this presents a paradox of political reform. Reformers can either restrict the campaign finance activities of organized interests or disclose their lobbying activities more fully, but not both. I provide estimated totals of registered interest groups given a set of laws that maximizes compliance.