The Rotating Presidency of the Council of the European Union and Interest Group Activity

We study interest group activity in the context of a multi-level, multi-stage governance system. In particular, we develop a game-theoretical model to analyze how interest groups choose at what level and stage of governance to organize their lobbying activities. We find that it may be optimal for interest groups to transmit information to politicians and bureaucrats at lower governance levels and early in the legislative process. To empirically test our theoretical model we study interest group activity in the European Union (EU) and leverage a unique feature of it – the rotating Presidency of the Council of the EU. The Council Presidency rotates every six months among the member states and provides a unique source of exogenous variation in agenda-setting powers. We exploit this variation and study detailed economic activity at the nuts2 regional level. Our findings indicate that interest group activity surges in the capital region of the country that holds the Presidency. We conclude that lobbying is a complex and dynamic interplay across various levels of government.