That ensures lobbying.

Why businesses lobby To understand the techniques businesses employ to lobby for their interests, as well as the lengths to which they are prepared to go to safeguard these interests, we need to understand their incentives for doing so. The literature on lobbying identifies three main rationales for interest groups to develop a lobbying strategy: to achieve their political goals (Beyers 2008: 1192; Michalowitz 2007); to respond to organisational needs (Binderkrantz 2005; Lowery 2007); to react to contextual pressures (Baumgartner et al 2009; Mahoney 2007). Put simply, businesses are prepared to invest considerable resources into efforts to increase or at least maintain their bottom line. Alongside advertising, public affairs and market communications, lobbying public decision makers is a key component of these efforts. In fact, according to a recent study of lobbying and public affairs in Europe, “in the global marketplace, to be competitive means increasingly being able to exert pressure on government” (Bitonti and Harris 2017). “Knowledge of the political market” has come to be seen as “contributing directly to business performance” (Andrews 1996: 79). Miller (2006) even writes that “a company's return on lobbying and campaign contributions – let's call it return on political investment, or ROPI – is astronomically higher than any real investment it can make”. Academic studies confirm that corporate lobbying leads to higher shareholder value. In a study of more than 20,000 firms in 47 countries, Faccio (2006) found that, on average, firms experience a 2 per cent increase in shareholder wealth after the announcement that their executive or large shareholder is entering politics. Conversely, Faccio and Parsley (2009) observe a value loss of about 2 per cent after an event that disrupts a firm’s political connections. Particularly in high-stakes sectors, such as infrastructure or manufacturing, failure to secure contracts or maintain good relations with regulators can threaten the very existence of some companies (Bitonti and Harris 2017). Mathur et al. (2013) observe a positive correlation between how intensively a firm lobbies and its value creation. They therefore expect that most large firms will “pursue lobbying as a nonmarket strategy to create value” (Mathur et al. 2013). Businesses lobby policymakers for a number of reasons, such as winning contracts, entering new markets and protecting their position in existing markets, as well as influencing laws, regulations and public policies that affect their area of operations. Broadly speaking, there are two main arenas in which companies seek to consolidate political capital and exert influence: when interacting with the state as regulator and the state as purchaser. Influencing regulations and public policy Governments legislate and regulate on a huge range of matters, from product safety and packaging to intellectual property, fair trading Transparency International Anti-Corruption Helpdesk Businesses’ lobbying practices 5 practices, civil rights, environmental issues and so on. All such measures can directly affect how advantageous a given business environment is for a firm, and businesses consequentially have a clear incentive to try to lobby decision makers to make the marketplace as favourable as possible. Indeed, as well as adding market value, lobbying has been shown to result in favourable policy outcomes. Lord (2000) found that congressional staff in the United States perceived professional lobbying as the most effective means of influencing legislation. Winning public procurement tenders Governments are typically one of the largest players in a country’s economy. The government acts as purchaser of services and allocator of state resources, and public contracts form the backbone of many firms’ revenue streams. Particularly when it comes to public procurement processes, the winner-takes-all model ensures intense lobbying on the part of companies competing in the tender (Bitonti and Harris 2017).