Interest groups in the European Union and their hiring of political consultancies
| Author | Oliver Huwyler |
| DOI | 10.1177/1465116519897820 |
| Published date | 01 June 2020 |
| Date | 01 June 2020 |
| Subject Matter | Articles |
Article
European Union Politics
Interest groups in the
2020, Vol. 21(2) 333–354
! The Author(s) 2020
European Union and
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DOI: 10.1177/1465116519897820
their hiring of political
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consultancies
Oliver Huwyler
Department of Political Science, University of Basel, Basel,
Switzerland
Abstract
Interest groups do not only attempt to influence European legislation by devising and
executing their own strategies, or relying on their allies. Almost 50% have also expe-
rience in hiring political consultants. Using novel survey data from the policy formula-
tion stage, this study shows that business interest groups are more likely to hire
consultancies than non-business interest groups. It suggests that business associations’
higher likelihood of hiring consultancies is linked to membership promotion. For firms,
it likely relates to their need for specialised lobbying tools and trust-building measures
when seeking private goods from policy-makers. Furthermore, the results indicate that
consultancy hiring by business interest groups becomes less likely the more they focus
on lobbying. This moderation effect highlights that business interest groups show
awareness of principal–agent problems and take mitigating action.
Keywords
Consultancies, European Commission, interest groups, lobbyists, policy formulation
Corresponding author:
Oliver Huwyler, Department of Political Science, University of Basel, Petersgraben 52, 4051 Basel,
Switzerland.
Email: oliver.huwyler@unibas.ch
334
European Union Politics 21(2)
Introduction
The continuous increase of the European Union’s (EU) policy scope, degree of
decision-making competences and the successive enlargement rounds has given rise
to a high number of interest groups (IGs) competing for access to policy-makers
and influence on policies (Van Schendelen, 2013). This influx of IGs in Brussels has
created a large market for servicing their needs (Lahusen and Jauß, 2001). A wide
array of professional consultancies, lobbying law firms and freelance consultants
(henceforth all called consultancies) provide IGs with support at various stages of
the European policy-making process (Lahusen, 2002, 2003; Zetter, 2011). Between
1999 and 2019, the number of consultancies active in EU affairs has quadrupled
from 290 (Lahusen, 2002) to close to 1200 according to the EU’s Joint
Transparency Register.1
While the number of consultancies has strongly increased over time, surprising-
ly, little is known about IGs’ relationship with these lobbyists in the realm of EU
politics. This article aims to offer first insights into two integral aspects of collab-
oration between IGs and consultancies by focussing on policy formulation by the
European Commission. Apart from providing descriptive insights into IGs’ col-
laboration with consultancies, it addresses the underlying conundrum of what
drives IGs’ decision to hire consultants. It develops and tests a theoretical model
that seeks to explain why business IGs, i.e. business associations and firms, are
more strongly incentivised to work with consultants than non-business IGs, and
how attention to lobbying moderates this behaviour.
Previous studies from the United States (US) on IGs’ collaboration with hired
lobbyists have found that direct contact and access to policy-makers drive the
consultancy business. Political consultants derive their value for their clients pri-
marily from access to policy-makers (Bertrand et al., 2014). The growth of the
consultancy market is subsequently largely attributed to the role of repeated
agency contracts between consultancies and policy-makers (Groll and Ellis, 2017).
This notion of consultants as sellers of access has important normative impli-
cations. It infringes on the pluralist ideal of equal access for different interests (cf.
Dahl, 1961). The governing principles of input and output legitimacy for obtaining
access are undermined. Adapted to the context of the European Commission,
selling access implies that the Directorates-General are weakened in their function
to filter IGs when drafting policy proposals (Broscheid and Coen, 2003; Coen and
Katsaitis, 2013). Consultants might exacerbate the existing preponderance of busi-
ness interests in the European IG population. As the number of business
IGs already outweighs other organisational types, business interests might also
exploit their comparative resource advantage by working with consultants (cf.
Coen, 2007: 335).
However, existing work on consultancies in the EU is scant. Arguably, the most
thorough studies on the relationship between IGs and consultancies have been
conducted by Lahusen (2002, 2003) and Lahusen and Jauß (2001). In his work,
he maps the development, institutionalisation and structure of the EU consultancy
Huwyler
335
industry. Overall, scholarly attention has gone rather to the relationships between
IGs, decision-makers, the public and/or constituencies.
The reasons for this are twofold. On a theoretical level, consultancies have often
been lumped together with IGs, given that both seek access and influence on
policy-makers. This conceptualisation disregards a small but subtle difference.
IGs are active on policy issues they deem crucial for their area of operation.
Consultancies, however, only become active in policy-making once IGs hire
them. Consultancies base their business model on furthering others’ special inter-
ests; usually without being affected or holding any ideological preference over
policy outcomes (Groll and Ellis, 2014: 300). The consequences of their actions
for their own business are primarily reputational and determine their future access
to policy-makers (Groll and Ellis, 2017: 1871).
On the observational level, IGs’ collaboration with consultancies often remains
shrouded in secrecy. Many consultancies attempt to keep a low profile for the sake
of their clients’ credibility. Remaining largely absent from the public eye facilitates
collaboration between consultancies and IGs; especially when sensitive issues and
information are concerned (Lahusen, 2005; Lahusen and Jauß, 2001). Moreover,
low-key approaches help consultancies keep the details of their strategies trade
secrets (Giering, 2003).
The study of consultancy involvement in EU policy-making has therefore
remained very limited. This article offers a first look at IGs’ perspective on
hiring consultants. Limiting the study to the policy formulation stage, 1248
policy stakeholders from 40 countries were sampled in the context of four policy
proposals. They were sent an online survey that served to collect information on
their use of consultancy services, their lobbying capacities and organisational
characteristics. Three hundred and ninety-six organisations from 32 countries par-
ticipated, which put the response rate at 31.7%.
The analysis establishes two key findings: first, it reveals that business IGs –
business associations and firms – are more likely to hire consultancies than non-
business IGs. For business associations, the theoretical model suggests that the
higher likelihood of hiring consultancies is driven by concerns for membership
promotion. For firms, the higher propensity to work with consultancies arguably
relates to their need for specialised lobbying tools and trust-building measures
when seeking private goods from policy-makers. Second, the results show that
consultancy hiring by business IGs becomes less likely the more they focus on
lobbying. This not only highlights IGs’ awareness of principal–agent problems
entailed by hiring consultancies. It also suggests that, compared to non-business
IGs, business IGs can realise larger gains from substituting consultants for alter-
natives such as in-house lobbyists.
The need for consultancies
The European Commission’s competence to initiate new policy in a broad range of
issue areas requires IGs to be ever ready. IGs build on knowledge about its agenda
336
European Union Politics 21(2)
and the capacities to act when necessary. Hiring consultancies allows IGs to par-
tially or completely outsource tasks that are needed for interest representation.
Consultancies help IGs gain awareness of their policy goals, grasp the function-
ing of the European legislative process and to keep them updated on developments
in their issue areas (Coen, 2002; Showalter and Fleisher, 2005). Once relevant
issues have been put on the agenda, consultancies support their clients during
various crucial decisions: whom to target, when to lobby and which content and
strategies to use in a certain context (cf. Bernhagen et al., 2015; Binderkrantz,
2005; Chalmers, 2012; Eising, 2007). Consultants offer counsel, execute or provide
support for a broad spectrum of lobbying approaches ranging from numerous
individual strategies directly targeting policy-makers, joint action within coalitions
of like-minded actors (Geiger, 2006; Klu¨ver, 2013) to the use of public political
strategies (Berkhout, 2013; Beyers, 2004).
While consultancies allow IGs to build up or improve their interest representa-
tion, hiring them also comes at costs, both financially and control-related. IGs
often assume a substantial financial burden when they hire consultancies for these
tasks.2 At the same time, IGs also incur a loss of control in their operations when
consultants are hired. The structure of the consultation process exhibits many
characteristics of principal–agent relationships. IGs partially or completely relin-
quish their interest representation to consultancies. While IGs have...
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