DEFINITION of 'Lobby'

Lobby is a group of like-minded people banded together to influence an authoritative body, or, as a verb, to exert that influence (i.e., "to lobby"). A lobby is typically formed to influence government officials to act in a way that is beneficial to the lobby's best interests, either through favorable legislation or by blocking unfavorable measures. Lobby groups consist of individuals, groups and companies and can be particularly active and well-funded by certain industries. Because of the negative effect lobbies can have by essentially circumventing the democratic process, some countries feel the need to regulate their activities.

'Lobby'

Lobbyists crawling around Washington D.C. and state capitals may serve a positive role in illuminating or clarifying issues germane to industries or professions, but they are generally viewed pejoratively as "special interest" groups. Lobbies are paid substantial amounts of money by their clients to sway the decisions of lawmakers to pass advantageous legislation for dozens of industries, most prominent of which are pharmaceuticals, oil and gas, insurance, aerospace and defense, utilities, banks and real estate. There is even a lobby for lobbyists. To quote Tony Montana in Scarface, "In this country...when you get money, you get the power." It's a two-way street in the halls of power - a lobby will contribute to a lawmaker's campaign fund in return for his or her vote for a piece of legislation that will benefit the industry. It may not seem fair to the average American that an interest group can "buy" a vote, but that is how it works in politics. Despite anti-lobbying rhetoric spewed by a candidate on the campaign trail, the candidate, if elected into office, does little or nothing to put an end to special interest money. In fact, these politicians often expose themselves as hypocrites when they accept donations from lobbies.

Are All Lobbies Bad?

Practical-minded people will note that competing interests in a democratic process is natural. Where lines may be drawn, however, are in cases that are considered harmful to society by a majority of Americans. There is debate whether guns and tobacco fit this category. Processed foods, sugary drinks and expensive drugs? Some do not like the lobbies that push their agendas. Also, if a lobby simply outspends a competing interest to get what it wants, the question of fairness arises. There are lobbies, on the other hand, that are seen positively - even as essential where the public good is concerned. These lobbies are tied to environmental groups, education and human rights advocates, to name a few. These lobbies won't be as well-funded as the the industries and interest groups that oppose them, but at least they will have a voice.

RELATED TERMS
  1. Bribe

    An illegal payment from one party to another, usually in return ...
  2. American Petroleum Institute

    The American Petroleum Institute (API) is a leading oil and gas ...
  3. American Bankers Association - ...

    The American Bankers Association (ABA) is the largest banking ...
  4. Market Failure

    Market failure is the situation in which there is an inefficient ...
  5. World Gold Council - WGC

    The World Gold Council is a nonprofit association of gold producers, ...
  6. Affiliated Person

    An affiliated person is someone in a position to influence the ...
Related Articles
  1. Investing

    Which Industry Spends the Most on Lobbying?

    All major companies have lobbyists gunning for their interests in DC. Here is a breakdown of the top spenders on lobbying.
  2. Investing

    The Differences Between Bribery And Lobbying

    Critics of lobbying accuse the practice of being similar to bribery, but there are many differences.
  3. Tech

    Big Tech Spent Record Amounts on Lobbying Under Trump

    Last year, tech giants spent record amounts on lobbying as the threat of regulations grew.
  4. Investing

    Facebook Looks to Grow Washington Lobbying Army

    The social network advertised 14 policy-related job openings on its website amid growing scrutiny over its handling of user data.
  5. Retirement

    Will State-based Auto IRAs Be Nixed by Trump?

    Will a new law that encourages states to develop IRA-based savings programs survive under the Trump administration?
  6. Taxes

    Did a Beer-Loving ‘Bro’ Write the New Tax Bill?

    Beer, wine and liquor producers emerged as remarkably big winners in the new tax law. But were their tax breaks the result of real economic need?
  7. Insights

    White House Advisor Bannon Wants 44% Tax on Income Over $5M

    Steve Bannon is said to be lobbying for a new 44 percent top marginal tax rate for people who earn more than $5 million a year, with the revenue paying for tax cuts for the rest.
  8. Insights

    Money And Politics

    Learn about the progression of events and legislation that shaped and influenced today's political environment.
  9. Taxes

    Possible Effects Of The Online Retail Tax

    The U.S. Senate has passed a bill that will impose a sales tax on online retailers. Discover how the Marketplace Fairness Act could affect your bottom line.
RELATED FAQS
  1. What are key government regulations that affect investing in the banking sector?

    Discover how the global financial crisis of 2008 changed the face of banking in the United States and around the world by ... Read Answer >>
  2. In what context is a corporation considered to be an individual entity?

    Read about when a corporation is considered an individual entity, when it is not and why corporations are not considered ... Read Answer >>
  3. What is comparative advantage?

    Comparative advantage is an economic law that is foundation for free-trade arguments. Read Answer >>
  4. Is there a difference between financial ratio analysis and accounting ratio analysis?

    Discover the economic factors that most influence corporate bond yields. Corporate bond yields reflect the market's assessment ... Read Answer >>
Hot Definitions
  1. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  2. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
  3. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
  4. Limit Order

    An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.
  5. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
  6. Return on Investment (ROI)

    Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency ...
Trading Center