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Sleeping with the Enemy: How Politicians and Interest Groups Adapt their Collaborations to Reputational Threats

Frankfurt, Germany 24 August 2023 – 26 August 2023

Miguel Espinosa (Bocconi University); Akhil Ilango (Pompeu Fabra University); Giorgio Zanarone (HEC Lausanne)

G2 SIOE & Management (II): Non-Market Strategy
Chair: Giorgio Zanarone
Room HZ9
Strategy / Institutions and organizations in political economy

Abstract

How does the reputation of interest groups affect their collaboration with politicians? We address this question using unique data on the public speeches and lobbying contacts of U.S. legislators. We find that when external events tarnish a foreign country’s reputation, legislators with prior connections to that country publicly distance themselves from it through their speeches, while meeting more often with its lobbyists. Our results suggest that politicians and interest groups navigate crises by strategically decoupling the public and private dimensions of their collaboration. On the one hand, politicians protect themselves from reputational spillovers through public distancing. On the other hand, interest groups increase the assistance they provide to politicians via lobbying in order to motivate those politicians to continue a private collaboration that is now less appealing to them.

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