BRAZIL AND INDIA: BUSINESS LOBBYING
Chapter 4 presented evidence testing the first step of the causal link between institutions and corruption, namely the link between legislative institutions and lobbying. This chapter presents evidence on the second link, that between lobbying and corruption. Hypotheses H1b, H2b, and H3b state that when agenda-setting, amendments, and rules on voting defections give political parties control over these key dimensions of policymaking, ceteris paribus, lobbying should lead to higher political corruption. Hence, the institutional design of these legislative institutions defines the conditions under which legislative lobbying is more likely to lead to higher political corruption. As I argued in chapter 2, under strong parties, higher political corruption also leads to higher overall corruption because strong parties are successfully able to control delegation decisions. This allows them to co-opt extralegislative institutions such as the bureaucracy, the judiciary, and the police to support their delivery of policy outcomes to business donors thus increasing the extent of corruption and hence, generating higher levels of corruption in party-focused countries.
In this chapter, I test these hypotheses using a combination of data from the surveys and interviews conducted in Brazil and India for this project, secondary data provided by other scholars, anecdotal examples, and, finally, survey data from the International Country Risk Guide (ICRG), Transparency International (Tl), and the World Bank (WB). These distinct and independent bits of evidence all strongly support the hypothesis that institutionally induced, party-directed lobbying leads to higher corruption levels in India relative to the corruption levels realized by individual-focused lobbying in Brazil. I first present evidence that legislative lobbying by business interests is a significant source of political finance and corruption in both these cases, and I then demonstrate that it leads to higher political and aggregate corruption in India. The next three sections present evidence that shows the differences in the dynamics of financial demand and party capacity to supply it that connect stronger parties to relatively higher levels of corruption in India compared to Brazil. Finally, I use time-series