A common argument in the literature is that firms in poor countries are more likely to pay bribes to get around regulatory constraints, while firms in rich countries are more inclined to lobby the government to change laws and regulations. This chapter argues that this is an oversimplification which does not reflect how policy is actually influenced in poor, weakly regulated countries. Lobbyism in such countries is more prevalent than previously assumed in both academic and policy-oriented literature. When interest groups become more influential, companies and business associations may grow a preference for lobbyism over corruption. The chapter underscores the need for better understanding of how the rules of the ‘lobby game’ are affected by uneven power relations between various interest groups, and how uneven power relations between interest groups are shaping policies.

Odd-Helge Fjeldstad

Research Professor, Coordinator: Tax and Public Finance