Influence by Intimidation: Business Lobbying in the Regulatory Process.

The article examines how business groups influence regulatory policymaking not only through exchange, persuasion, or subsidies but also via intimidation, defined as the communication of political information signaling a firm's capacity to challenge regulators by appealing to their overseers. A formal signaling model predicts two key effects of such intimidation: a chilling effect, where early lobbying deters agencies from proposing new regulations, and a retreating effect, where lobbying combined with oppositional comments leads agencies to withdraw proposed rules. Empirical analysis of federal regulatory data and lobbying expenditures supports these hypotheses, showing that increased business lobbying is associated with fewer regulatory proposals—especially costly ones—and a higher likelihood of proposal withdrawals when opposition is both vocal and accompanied by lobbying. The findings suggest that lobbying serves as a credible political signal that shapes regulatory agendas by influencing agencies' anticipations of political costs, highlighting a broader and more subtle scope of business influence than previously recognized in studies focusing solely on policy information or comment content.