Monday, March 25, 2013


An interesting study has been published that has analysed the lobbying activity of Enron.  I haven't read it in detail yet, but it is an interesting methodology based on textual analysis of e-mails.  The data is only available because of the collapse of Enron.

The interesting part of the conclusion is that the focus on effort is not on elections, but rule making.

In studying the attention Enron devoted to various political activities through its e-mails, we find very little evidence consistent with the transactional approach to political influence. Election-related e-mails make up only 1% of Enron's political e-mails—and even within that 1%, there is scant evidence that Enron's staffers considered themselves to be buying the support of candidates. Instead, we observe Enron's political attention to be focused primarily on monitoring and formal participation in rule making and other executive-branch proceedings.

This is unsurprising to a professional, but I gather it is to academics.

The second part is the revelation in all its glory of the regulatory information assymetry problem. 

Certainly, Enron had the capacity to make political contributions, and it did so. But perhaps its greater resource was its monopoly on policy-relevant information about electricity, natural gas, and communications markets, information that policy makers could not easily obtain elsewhere.

Interestingly one of the things that happened as a consequence of the greater faith in markets in the last quarter of the last century was that Government decided to outsource a lot of policy research activity. Also "red tape reduction" has been used to limit mandatory reporting. 

Together these increase the power of the industry lobbyist and their "monopoly on policy-relevant informnation."

Unfortunately this is a topic on which no one ever speaks.

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