Public Policy

Public policy affects politics, society, and companies

Companies don’t operate in a vacuum. They operate within a society with a political order that places expectations on them. At the same time, they are part of public policy. Public policy encompasses the content-related decisions, goals, and activities of everyone involved in the political process. Politicians don’t always have a complete overview of the effects their decisions or enacted laws could ultimately have. They depend on the expertise of representatives of the business, academic, and scientific communities, who usually appear in the form of lobbyists. Drawing on this expert knowledge, politicians take in account as many perspectives and interests as possible that have an impact on the political decision-making process.

Why lobbying is important

Interest groups that try to exert influence on decision-makers in terms of public policy aren’t a new development and are part of a democracy. Lobbying plays a beneficial and central role for political activity within a democratic and representative system, since lobby groups have the expertise and important background details that are crucial for the political discussion process. When formulating laws, for example, it is even explicitly stipulated that the business community and associations must be consulted beforehand. However, lobbying isn’t only reserved for large corporations: NGOs, such as environmental and human rights organizations and social associations, are also engaged in lobbying.

In fact, lobbying isn’t only reserved for professional advocates, either. In principle, everyone is free to explain their own point of view to their representatives and therefore influence their opinion.

Criticism of lobbying

Often, large-scale lobbying fails mainly due to financial resources. While large companies and trade associations can constantly send their representatives to Berlin and go to events themselves to express their own interests, medium-sized businesses or NGOs do not usually have these options available to them.

Lobbying is therefore often openly criticized: large corporations are accused of exerting too much influence on political decisions for the benefit of their own interests. This one-sidedness is often interpreted as manipulation that influences not only parliamentary democracy but also society in its own right. In addition, many former government officials with direct contacts in politics move within the ranks of financially strong lobby groups.

Counterbalances to trade lobbying

At present, it is not only business-related associations that are successfully getting involved in political events. Non-governmental organizations and trade unions don’t generate their influence through financial means, but through media pressure and efficient public communication instead, such as via the Internet and social networks. The “Fridays for Future” movement, for example, draws attention to current climate policy through demonstrations, strikes, and posts and sparks countless discussions and approaches to solutions within political decisions.

The concept of transparency and the lobby register

In March 2021, Germany’s “grand coalition” (coalition of the CDU/CSU and SPD political parties) agreed on the Lobby Register Act. The lobby register – also called the transparency register – is a publicly accessible, digital database where information on the work of lobbyists, advocates, companies, and associations is stored. The goal is to make the activities of each lobbyist and any potential conflicts of interest more visible. The lobby register provides for the following aspects:

• It is mandatory for lobbyists to register themselves in the register, provide information on their employers or clients, and supply information on the number of employees and financial expenditures.
• Trade unions, employers’ associations, political foundations, churches, and religious communities are exempt from this obligation.
• In the event of non-registration or the provision of false information, those concerned will be put on a “blacklist” and will no longer be allowed to carry out their lobbying activities. They may also be subject to a fine.
• The legal registration obligation for advocates and lobbyists should also apply to government representatives, parliamentary groups, and the German government.
• The Lobby Register Act does not provide for tracking how and where lobbyists try to influence the drafting of laws (“executive footprint”).