Introduction
The COVID-19 pandemic was associated with considerable shifts in the size and composition of public expenditures. As the European Central Bank (2023) summarized, the main shifts occurred in the key budgetary functions of economic affairs, social protection and health. These considerable budgetary increases in spending by over 6 percentage points of Gross Domestic Product (GDP) in the Euro area between 2019 and 2021 were largely driven by governments’ policies to stabilize their respective economies, fiscal packages in 2020 and 2021 to support households and firms, as well as expenditure on social protection and public health.
Some of these public funds were allocated to and through interest organizations, such as business groups and companies, unions and associations of professionals, Non-Governmental Organizations (NGOs) and charities. These organizations were faced with new tasks and organizational challenges, for instance needing to prepare and issue Covid-related information, initiate service-provision projects, secure organizational maintenance or membership services, and ensure the economic or social recovery during and after the pandemic. The targeted distribution of public funding should ideally have supported these essential functions during the global crisis.
Understanding whether and how interest organizations have increased or lost public funding by attracting newly available resources is, therefore, of prime importance. On the one hand, such an inquiry helps identify the ultimate beneficiaries of funding flows during the exceptional and important case of the pandemic, characterized by a stressed interest community under high pressure and exceptionally high public spending. On the other hand, this case is an insightful testing ground for more general concerns about the ways in which interest organizations attract public funds.
At the most fundamental level, it is a case that helps answer the simple but important question: does lobbying work when it comes to attracting public resources for an organization? Evidence in support of an actual effect of lobbying on political outcomes has long been mixed,Footnote 1 and funding changes offer another testing ground as to whether lobbying matters.
Furthermore, we believe that it is a useful case to evaluate what roles interest organizations play in supporting or distorting an efficient distribution of scarce public resources. Long-standing theories of lobbying diverge in their assessments of the inefficiencies interest organizations generate. Pluralist theories view organizations as mobilizing in response to disturbances in social and economic relationships, with the state potentially supporting those in greatest need through targeted funding. In contrast, political economists anticipate substantial welfare losses from rent-seeking, whereby organizations lobby chiefly to maximize the extraction of private benefits. While these perspectives are not mutually exclusive, existing research rarely integrates them within a single research design. As a result, we lack empirical evidence on whether one of these logics prevails over the other, or how the two might interact.
This paper addresses this gap by examining the distribution of funds to interest organizations during the COVID-19 pandemic—a moment when vast public resources suddenly became available. We investigate which organizations secured larger shares of this funding, and whether the patterns align the logic of rent-seeking, of pluralism or both.
Empirically we assess which types of interest organizations increased the funding they received from public sources during the global Covid-19 pandemic across seven European countries (Denmark, Sweden, Germany, Austria, Ireland, the Netherlands, Italy) and organizations active at European Union (EU) level. Given no comparable public data about Covid funding is available at organization-level, we rely on a two-wave cross-national survey dataset covering diverse types of interest organizations (surveys fielded in 2020 and 2021). After formulating competing hypotheses based on pluralist theory and rent-seeking perspectives, as well as hypotheses that link insights from both sets of theories, we test these using data on organizational vulnerability and lobbying activities collected in these survey waves, and taking potential time-lags in funding outcomes into account.
Our findings nuance earlier work on lobbying during the pandemic, which has shown that political systems were highly responsive to organizational grievances. Previous studies found that constituency ties shaped legislators’ attention to interest groupsFootnote 2 and that affectedness drove access to bureaucratic, parliamentary, and executive arenas.Footnote 3 In contrast, our analysis of reported funding changes reveals no such effect. Instead, higher lobbying activity—especially greater resource and time investment in seeking public funds—correlates with increased public funding, regardless of organizations’ affectedness. This pattern supports a competitive rent-seeking logic, whereby organizations at any level of need can secure funds by means of more intense lobbying. It also suggests that powerful groups not only influenced distributive policyFootnote 4 but also converted lobbying into tangible resources.Footnote 5 Yet, our results also show that the effect of lobbying varies with levels of mortality anxiety: stable organizations cannot rely solely on rent-seeking but must signal genuine need. Thus, pandemic funding partly differentiated between lobbying driven by necessity and lobbying as strategic competition.
These findings have important real-world implications, not least considering public spending was exceptionally high to tackle the pandemic. As the European Central Bank concludes, “[in] view of strains on public finances, choices on how to better allocate public resources are becoming even more important […] and the availability of data remains fundamental.” In this light, we interpret our findings as especially insightful and call for additional empirical research on the role of interest organizations in the allocation of public funding. Our analysis demonstrates that scholars of lobbying and interest organizations can contribute significantly to this effort.
Theory: public funding, pluralism and rent-seeking
Organizations’ ultimate goal and a key driver of their activity is organizational survival and maintenance.Footnote 6 Maintenance depends strongly on an organization’s success in securing funds from different “patrons,Footnote 7 ” one of which being the state. The empirical literature on interest groups and their lobbying success rarely focuses on this important relationship, often leaving its study confined to sociology and organization studies.Footnote 8
Instead, the interest group literature has a dominant focus on explaining organizations’ policy-driven activities, such as policy-related lobbying and cooperation,Footnote 9 access to political gatekeepers,Footnote 10 and success in influencing their decisions.Footnote 11 These policy-related activities have far-reaching consequences for the political representation of constituents and marginalized groups,Footnote 12 as well as biases and polarization in the political system.Footnote 13 This is why they constitute a key area of research in general political science.
While policy-driven activities may, of course, partly contribute to organizational survival by signaling the political importance of an organization to gatekeepers or the public, much less is known about activities directly aimed at organizational maintenance.Footnote 14 In particular, the critical aspect of how groups secure public funding for organizational survival and maintenance is not often addressed empirically across the population of interest organizations, particularly in Europe.
More specifically, we contend that existing research on public resource allocation to interest groupsFootnote 15 is characterized by two limitations, which hinder a more general assessment of how interest organizations secure public funds. First, existing studies are often conducted in organization-type silos, for instance, addressing resource competition between companies regarding bail-outs or favorable tax policy,Footnote 16 or focusing on funding allocation to NGOs.Footnote 17
Second and relatedly, studies tend to be somewhat fragmented when it comes to their theoretical assumptions. For instance, existing studies assess how and when business groups and firms are capable of obtaining, for instance, tax benefits, trade protection and firm profits though lobbying.Footnote 18 These studies build implicitly or explicitly on the concept of rent-seeking, Footnote 19 which denotes a situation where organizations use political activities to attain special privileges from government, often at the expense of general welfare.Footnote 20 These theories of lobbying are highly push-oriented stressing that organizations’ individual incentives to secure benefits trigger them into surplus lobbying activity, which is expected to result in rent extraction. Notably, the applied literature building on the rent-seeking concept tends to entail a relatively narrow focus on firms and/or contract lobbyists and their role in “capturing the spoils” or in making “lobbying pay off.”Footnote 21 It is usually silent on a broader range of organizations, such as civil society organizations, which also compete over limited resources.
These organizations are typically treated in a different literature, for instance in the subfield of voluntary organizations’ studies. A common theoretical feature of this latter body of research is that scholars assign a much more active and benign role to the state in the distribution of resources to organizations, often rooted in pluralist principles and associational democracy.Footnote 22 These approaches see the allocation of funding as a purposive, re-distributive instrument in the hands of the state to allocate resources “where they are needed.” This view pairs well with pluralist theory, Footnote 23 with the addition of a pull perspective on lobbying, whereby political gatekeepers select to interact with organizations that are in need or deserving of resources. Empirically, this strand of literature looks, for instance, at how governments fund organizations via direct subsidies in support of projects, core activities and/or service provision for public causes or constituencies of societal importance, sometimes spanning diverse types of interest groups, though rarely firms.Footnote 24 It also raises questions as to how the state as a patron in turn affects the priorities of interest groups.Footnote 25
These views on resource allocation to organizations—the logic of competitive rent-seeking and of pluralist redistribution of public resources—coexist,Footnote 26 but have to our knowledge, not explicitly been combined into a single framework; hence, we do not know whether (or when) either rent seeking or pluralist mechanisms are more prevalent, and how the two may interact. In the following, we therefore build on these two broad theoretical approaches and formulate five testable hypotheses.
Hypotheses: implications of responsiveness to disturbances and rent-seeking
We start with arguments based on pluralist theory, where the distribution of public funding can be interpreted as a response to actual disturbances in society. Organizations vary in characteristics which make them more or less suitable recipients of public funding. Arguably, a key aim for state institutions in distributing public funds is (or, normatively speaking, should be) addressing new policy problems, constituency interests, and societal or economic needs. This idea that public funding to interest groups serves as a mechanism for participation in policymaking is central in the literature on civil society organizations.Footnote 27 Public funding represents a determining source of income especially for NGOs, citizens associations, associations of professionals, farmers and other groups across democratic systems.Footnote 28 Similarly, state aid, sectoral tax benefits and other similar forms of aid represent key benefits for economic interests.Footnote 29 In other words, through these instruments, state funding has the ability to reach policy goals and even “mold” the interest group system,Footnote 30 given the state acts as a key stakeholder in the maintenance of interest group communities.Footnote 31
In this view, the state actively draws on the group community when reacting to new policy problems. As pluralist theory underlines, interest organizations perform a central function in mobilizing societal interests.Footnote 32 Especially in response to a crisis where major “disturbance[s] in established relationships in society […] may produce new patterns of interaction aimed at restricting or eliminating the disturbance[s],”Footnote 33 existing groups organize constituency interests to try to address the disturbance. Far from all these activities are about lobbying; Interest organizations help their members (or other stakeholders) collect information, share good practices, and may pool resources to provide services tailored to dealing with the changed circumstances. During the pandemic, these might, for instance, span from reaching physically and socially isolated sections of society, such as the elderly and people with chronic diseases, to devising accessible online services to share information or simply socialize.
In such a view, the state might piggyback on those efforts. If it can identify organizations that can reach such vulnerable audiences, it can choose to support their services by allocating funding to them, meaning allowing them to hire extra staff or in other ways invest in extending their services to meet local needs effectively. Moreover, in its role as patron of the interest group community, the state can be expected to try stabilize the system by placing its hand under organizations that are momentarily overwhelmed by the crisis.
But how can the state know where to allocate its resources? Arguably, there should be many informational cues in the policy system that point to these actors. Policymakers can draw on several informational channels,Footnote 34 including staff in the executive and bureaucracy, media debates, as well as academics and other experts potentially organized in advisory committees. In fact, there might be such an abundance of information that they are overloaded with information,Footnote 35 and policymakers will turn to trusted sources as heuristics to cut through all the noise. Skilled bureaucrats and experts should help them identify the “right” recipients, not least in a crisis context where new policy issues are salient and resources are used to collect and systematize information. In addition, of course, interest organizations themselves may voice disturbances to their activities and organizational distress to the state through lobbying, a point that we will return to later.
With these ideas in mind, the allocation of public funding here is conceptualized as responsive to interest groups’ needs. In the crisis context, we identify two dimensions of such need: first, the extent to which the crisis affects organizations’ or their constituency’s interests; and the degree to which organizations’ actual continued existence is perceived as under threat.
Importantly, despite their broad implications, crises usually disproportionally affect some sectors and constituencies. The 2008 financial crisis disproportionally affected the financial sector, and the following economic downturn had particularly severe effects on manufacturing and construction. At the same time, the crisis and austerity overwhelmingly affected more vulnerable social groups and advocates thereof.Footnote 36 The same disproportional effects apply to interest group communities. For instance, as a result of the Covid-19 pandemic, interest groups in the sectors of health, culture, sport and hospitality where particularly affected.Footnote 37 Governments, parliaments and bureaucracies in Europe responded to this form of affectedness by granting increased access to more affected organizationsFootnote 38 and there is evidence that affected groups enjoyed more influence on policymaking.Footnote 39 As formulated in our first hypothesis, we expect that the same will apply to changes in public funding: Assuming that public funds were purposively distributed during the pandemic to address its adverse effects, we expect that the more affected organizations were by this crisis, the more likely they should be to attain an increase in their public funding (H1).
At the same time, crises can challenge the continued existence of organizations. Circumstances of heightened financial pressures, increased uncertainty, and large and sudden policy changes can threaten organizational maintenance. Based on the discussed strands of pluralist literature, we expect that organizations with higher mortality anxiety, Footnote 40 meaning their fear of organizational collapse, will be more likely to experience an increase in public funding. Again, we here expect purposive funding allocation by the state to be responsive to organizational disruptions, for instance to avoid a collapse of civil society organizations which may result in a representation gap of important societal or economic interests; or to avoid shortages in service provision and early termination of government contracts for services. Similarly, collapse of business groups may result in failures to deliver contracts for procurement, higher levels of unemployment and potentially economic turmoil, which governments generally wish to avoid. Mortality anxiety as a response to exogenous shocks therefore applies to diverse types of interest organizations,Footnote 41 and we expect it to be associated with a higher likelihood of increased public funding (H2). In sum, we test two hypotheses associated with pluralist disturbance theory:
H1 The more highly affected an organization’s interests are by the pandemic, the more likely it is to attain an increase in public funding.
H2 The more worried an organization is about its ability to survive, the more likely it is to attain an increase in public funding.
Theories of rent-seeking add to this picture an alternative—and much more pessimistic—account of who profits most from the availability of state funding. Inflated public spending can attract the attention of rent-seekers, as one form of concentrated privileges these can try to attract.Footnote 42 The rent-seeking perspective underlines that lobbying is an inherently resource inefficient exercise, because the hope of attaining highly concentrated advantages, such as public funding, makes competing organizations scale up their lobbying activities; and, given competitors will do the same, the result is an equilibrium with high level of (resource intensive) lobbying.Footnote 43
This perspective also underlines that lobbying is likely to lead to suboptimal outcomes at the societal level, because it helps secure particularistic benefits from decisionmakers, depleting the pool of resources available for other (diffuse) causes and organizations. Put differently, organizations are expected to “wrestle” with each other to secure a bigger slice of the “social pie” for themselves or their members, thereby distorting the “optimal” use and level of public resources.Footnote 44
Commentators have warned that the pandemic fostered such tendencies. For example, the Recovery and Resilience Plans of the European Commission worth €700bn attracted extensive criticism when Italy asked for the maximum amount of funds from NextGeneration EU “without having clear plans on how to spend them.”Footnote 45 The availability of this funding—paired with a situation of uncertainty and incomplete information regarding the consequences and duration of the crisis—has also attracted extensive attention from Italian interest organizations which have tried to influence the allocation of such public funds.Footnote 46 As Daumann and Follert (Reference Daumann and Follert2020: 52) put it, these circumstances are ideal “for interest groups to try to take advantage [of] this situation by putting the political actors under pressure.”Footnote 47 This described dynamic is a classical rent-seeking one, assuming that actors attempt to maximize their own benefits when such funds become available.
The premise in this rent-seeking view is that lobbying does not send accurate signals about need to policymakers. Competitive rent-seekers—at any given level of need or perceived survival threat—can be expected to use lobbying in an attempt to extract resources. How will they lobby to do so? A typical strategy that interest organizations may employ when competing for benefits is targeting decision-makers directly through inside lobbying.Footnote 48 At the same time, Keller (Reference Keller2018) shows how crisis circumstances may drive otherwise “quiet lobbyists” to employ noisy lobbying tactics, as well. Put differently, in moments of heightened attention and saliency, interest groups may seek to attract attention through a combination of both inside and outside lobbying.Footnote 49 An expectation, based on theories of rent-seeking, is that a higher level of lobbying activity—either direct or indirect—is associated with a higher likelihood of increasing an organization’s public funding, because any lobbying interaction offers opportunities to push an organization’s interest in maximizing its gains.
Of course, it needs to be acknowledged that not all lobbying necessarily aims at securing material benefits from governments, such as the available recovery funds in case of the pandemic. Many lobbying activities are, instead, attempts at affecting regulatory rules or political debates, without seeking to secure public funding for an organization. During the pandemic for instance, some lobbying activities may have focused on testing regimes or the use of masks, i.e. regulatory issues without (direct) distributive effects. We can therefore think of a subset of general lobbying activities that are specifically aimed at securing funding. These can ultimately be seen as linked to organizations’ survival concerns.Footnote 50 In general, funding can be sought from different sources, including members, other private donors or the state.Footnote 51 In the latter case, lobbying to attract funding from the state equates to lobbying on distributive (or redistributive) policies.Footnote 52 We call these funding-seeking activities, spanning direct or indirect lobbying efforts specifically aimed at securing financial support from the state, for instance for organizational maintenance or running of essential membership services. Arguably, this type of lobbying is essentially about signaling some kind of need for support from and to the state. Yet, recall from the above argument that, from the rent-seeking perspective, these signals cannot be expected to be accurate, as all organizations—in need or not—will try to get a bigger slice of the pie for themselves.
Overall, this leads us formulating our hypothesis tapping into the rent-seeking argument with both of these types of lobbying in mind. It depicts both general lobbying (H3a) and fund-seeking activities (H3b) of interest organizations as attempts by interest organizations to enrich themselves and distrusts the state in distinguishing between more and less “deserving” organizations. From this perspective, holding other characteristics such as affectedness and mortality anxiety constant, more lobbying and/or more fund-seeking lobbying should be associated with increases in funding.
H3 The higher an organization’s level of a) general lobbying activity and b) specific funding-seeking activity, the more likely it is to attain an increase in public funding.
Finally, we flesh out how the two theoretical strands may complement each other to distill how lobbying potentially acts as a necessary signal for the need-sensitive allocation of public funding. In other words, we test whether there is an interaction effect between the pluralist and rent-seeking mechanisms. While disturbance theory might be an important guiding principle for the allocation of public funding, policymakers’ information cues (from experts, the bureaucracy and broader media debates) are imperfect and may be insufficient to identify where exactly funding is needed the most. Decisionmakers may therefore need to be made aware of organizational grievances through active lobbying and fund-seeking. In that sense, the rent-seeking literature’s emphasis on responsiveness to the push side of lobbying (seeking funding) might be nuanced by pull or gatekeeper effects when decisionmakers prioritize those organizations that lobby for funds because they need them. In this perspective, lobbying does play a constructive role, because it is one of the cues that policymakers look for when allocating funding. At the same time, policymakers do not just take the signal at face value but draw on multiple sources of information to evaluate the credibility of interest group demands.
An observable implication of this explanation would be that funding increases only for organizations that signal their demand for funding and are, at the same time, considered in need by governments. Following this logic, high levels of affectedness or mortality anxiety during the pandemic need to be voiced and signaled by groups to policymakers through lobbying if one is to attain increased levels of funding. Our final two hypotheses summarize this expected interaction between the pluralist and rent-seeking logics:
H4 More frequent lobbying efforts are more likely to lead to an increase in public funding for organizations whose interests are more intensely affected by the pandemic, compared to less affected interest organizations.
H5 More frequent lobbying efforts are more likely to lead to an increase in public funding for organizations that are more worried about their ability to survive, compared to less worried organizations.
Research design
Sampling and survey wave design
The data for this study comes from the InterCov project, Footnote 53 a collaborative effort to document interest representation in selected European countries and at the EU level during the COVID-19 pandemic. We use two survey waves, fielded in summer 2020 and 2021, in Austria, Denmark, Germany, Ireland, Italy, the Netherlands, Sweden, and the EU. The surveys targeted 5,954 organizations in wave 1 and 5,770 in wave 2, drawn from official transparency registers (e.g., Austria, Ireland, EU), organizational and company directories (e.g., Italy), and prior research (e.g., Denmark, Sweden). In each country, a stratified random sample of ~700 organizations was drawn across business associations, professional associations, unions, and identity/ideational groups, supplemented by the 150 largest companies by revenue. For the EU, a larger sample of ~1,400 organizations was used (for more details about the sample, see Appendix A).
The surveys were administered online, with invitations and three reminders sent at two-week intervals to the person responsible for government affairs, where possible. Completion rates were 22.7 and 14.3 percent in waves one and two, respectively, varying by country—highest in Denmark and Sweden, followed by Ireland and the Netherlands, and lowest in Germany, Austria, Italy, and the EU. This variation aligns with other comparative interest group research.Footnote 54 While non-response bias cannot be ruled out, Tables A.2–A.4 show substantial variation in factors potentially linked to non-response, such as organizational distress or lobbying resources. The surveys contained about 40 questions on interest representation during the pandemic; wave two also included a battery of questions on obtained funding. Full questionnaires are available via Appendix A.
Dependent variable: changes in public funding during the pandemic
Our dependent variable Public Funding Change captures the self-reported change in funding from governments and other public sources during the pandemic. The June 2021 survey first asked respondents to report on the composition of the organization’s overall yearly budget that, under normal circumstances, comes from different sources, including “Public/government funds.” Subsequently, we asked respondents for each budget item to indicate whether this income source “increased, stayed constant or decreased during the pandemic.” The variable is coded as an ordered categorical variable taking three levels: 1 (decrease), 2 (stayed constant), 3 (increased). Approximately 50 percent of the respondents in the project’s data answered that this question was “not applicable” to their organization, for instance because public funding is not part of their budget. Our analysis in this study is restricted to organizations that reported public funding changes as applicable.
Of course, organizations that rely on public funding generally differ from those that do not. In Appendix B, Table B.1, we give an overview of how the subset of respondents completing the funding-related questions differs from all respondents. Unsurprisingly, NGOs and citizen groups are more reliant on public funding compared to business organizations (56 percent of observations in the analysis, as opposed to 33 percent in the full respondent sample).Footnote 55 Importantly, however, ca. 25 percent of the observations in the analysis are business associations and firms, and nearly 20 percent are trade unions and associations of professionals. This means we can still confidently analyze variation in public funding across group types, and group type is an important control variable for the analysis (see later section introducing all controls).
Among the respondent organizations that reported public funding as a budget source, ca. 12 percent reported a decrease, while 61 percent reported no change, and ca. 27 percent of respondents reported an increase. In this paper, our analysis focusses on explaining this change, while using an organization’s proportion of the budget which is normally derived from public funding as a control.
Figure 1 validates that increases in public funding in our dataset are mostly driven by the availability of new pandemic-related funding. The share of reported funding increases is considerably higher, at ca. 45 percent, among respondents that indicated to have received Covid-related funding. Footnote 56 Conversely, among organizations that reported not to have received Covid-related funding, only ca. 8 percent reported an increase in their public funding.
Distribution of public funding changes, N = 360.
Our analysis treats this variation in funding changes that mainly, but not exclusively, relate to the pandemic as the dependent variable. Based on this situation, where considerable amounts of new funding had suddenly become available, we ask: does increased funding benefit organizations that struggled the most during the pandemic; or are these funds obtained by those that can lobby intensively to extract rents?
Independent variables
To explain variation in Public Funding Changes, we rely on four explanatory variables: two related to self-reported vulnerability to problems caused by the pandemic and two operationalizations of lobbying activities.
Regarding the level of Affectedness (H1), we include organizations’ self-assessed affectedness by the pandemic, which we measured both early and later during the pandemic (in the 2020 and 2021 survey, respectively). Respondents were asked in each survey wave to rate whether the interests of their organization were more or less affected by the Coronavirus crisis, compared to other stakeholders in the country, with five answer categories ranging from (1) “much less affected” to (5) “much more affected.” Organizations that felt disproportionally affected in this way should arguably have more need for Covid-related funding to address the negative consequences of the crisis.
This measure of affectedness is relatively new to interest group research and has strengths and weaknesses. On the one hand, it gives a specific and comparable, organization-level rating of an organization’s grievances. On the other hand, the rating is a subjective, self-reported measure, leading to potential over- or under estimation of organizational affectedness by the pandemic. To check the robustness of our results with a more objective measure, we therefore replicate the analysis in Appendix C using a categorization of less and more affected sectors by the pandemic. Details about our classification are described in Appendix C, and Table C4 shows that our results are robust to this operationalization.Footnote 57
Our second measure to test the pluralist logic is called Mortality Anxiety and looks at perceived threats to the organization, i.e. fears related to their continued existence (H2). This is again measured both early and later during the pandemic through our two survey waves. Respondents were asked how worried people in their organization were about the negative effects of the Coronavirus pandemic on their organization’s future (wave 1) and the existence of the organization (wave 2). This standard measure of mortality anxiety ranges from 0 (not worried) to 10 (very worried).Footnote 58
Both for affectedness and mortality anxiety, we see a relatively high correlation of the same outcome over time (affectedness r = 0.44; anxiety r = 0.39). We still see the inclusion of both measures (in separate regressions) as highly relevant, because a time-lag between the time when organizational grievances and survival concerns are recognized, and the time when public funding is allocated, is conceivable and reasonable. Our analyses will therefore relate both early pandemic affectedness and mortality anxiety (summer 2020) and later values (measured in the summer of 2021) to changes in public funding.
Regarding the rent seeking hypothesis (H3), we test it with different, theoretically-informed measures of lobbying activity. First, we measure lobbying in general terms where every lobbying effort related to pandemic policies is a rent-seeking opportunity (H3a). We call this variable Frequency of Lobbying on Covid-related policies, and, again, we use both an “early” and “later” measure of lobbying activity during the pandemic. In both waves, respondents were asked how frequently their organization’s political and advocacy activity aimed at influencing Covid-related policies, on a scale from 1 (“Never or only once”) to 5 (“Almost on a daily basis). This includes both inside and outside lobbying, meaning that both direct and indirect political activities are considered. Wave 1 of the survey asked this in summer 2020 and for the time since the organization started activities on Covid-related issues. Wave 2 in summer 2021 asked this for political or public debates in the last 12 months (June 2020–June 2021). Note that, as expected, the correlation between these measures of lobbying activity over time is high (r = 0.64), and we include them in separate regressions only.
Subsequently, we look at relevant lobbying activities more narrowly, focusing on fund-seeking activities only (H3b). For these, we only have data from wave 2 of the survey, which included detailed questions on pandemic-related funding efforts. We use two alternative measures based on survey items placed before and after the respondents disclosed funding changes.Footnote 59 First, the variable Frequency of fund-seeking activities takes the average of two items on the frequency of efforts to obtain public funding for (1) organizational stability and (2) providing services or aid to members, constituents, or stakeholders (1 = “never” to 4 = “frequently”). Second, the variable Level of Investment in Fund-seeking measures the self-reported extent of resource investment in seeking public funding (0 = “to no extent” to 4 = “highest extent”). The two measures are strongly correlated (r = 0.56; Appendix B, Table B2) and are used in separate regressions.
A valid concern regarding our independent variables is that funding-seeking strategies and vulnerability (affectedness and mortality anxiety) might be highly related, and therefore empirically hard to disentangle. This is, however, not the case. The full correlation matrix in Appendix B2 shows, these are only weakly correlated (ranging between 0.16 and 0.29). Arguably this is a first indication that that lobbying (for funds) is not just a simple signal of need.
Control variables
We include a series of control variables in our analysis. First, we control for the share of an organization’s budget that comes from public/government funding in normal times. Organizations that heavily rely on public funding could be more likely to increase their funding from public sources during the crisis because they are on the government’s funding radar already. As shown by Crepaz and Hanegraaff (Reference Crepaz and Hanegraaff2020) past success in securing funding correlates with future funding.
We also control for group type. Different types of organizations may be more or less likely to increase their income from public sources. NGOs and citizen associations, which tend to rely more heavily on public funding, may, for instance, increase their income from public funding even more during the pandemic after charitable donations and fundraising activities fell. Yet, firms, business and professional associations may also require more public funding based on sectoral grievances experienced by the pandemic. Controlling for this allows for exploring relative differences between group type categories. We distinguish between business groups & firms (reference category), profession groups & unions and NGOs & citizen groups. Footnote 60 This classification is based on the respondent’s answer to two survey questions to characterize the organization and its focus and nature of represented interests (cf. Table B2 in the Appendix).
Moreover, we control for lobbying staff resources, which are likely to correlate with an organization’s ability to lobby for funding and communicate grievances to decision-makers with the aim of increasing the share of public funds. We measure this by the staff-size of an organization’s public affairs/government relations department using three categories (low: 1 or less full time staff; medium: 2–5 full time staff; high: more than 5 full time staff.Footnote 61
Next, organizations’ age may also relate to our outcome variable. Older organizations may have access and funding advantages over younger ones for having been “in the game” longer. We control for this in three intervals (<21 years, 21> years <50, >50 years).
We further include country-level differences, by including polity fixed effects. This allows us to account for potential differences between polities, caused for instance by the generosity of public funding for interest organizations or systems of interest representation.
Finally, to account for sectoral differences, we cluster standard errors by an organizations’ main sector of activity. Observations within each sector are unlikely to be independent with some sectors, such as health, hospitality and education being worse hit than, for example, agriculture.Footnote 62 Sectors of activity are derived from a set of three survey questions based on 27 different sectors grouped in 13 categories for simplification.Footnote 63
Analysis
In this section, we present the results of a series of multivariate regressions based on our survey data. We summarize results in coefficient plots, which show our independent variables and main controls.Footnote 64 Continuous variables and controls are rescaled to 0–1 to make coefficients comparable. All analyses also include organization age and fixed effects for country (coefficients not shown) and clustered standard errors by sector. Appendix C includes all results in table form (Table C1) and shows stepwise models (Tables C2 and C3).
Main effects
In the main analysis, we treat public funding changes in the three categories (decrease, constant, increase) as an ordinal variable. To complement our ordered logit models, the Appendix (Table C5 and C6) show results in logistic regressions (increase versus no increase) and simple OLS regressions (treating change in the three categories as linear, instead), as well.Footnote 65
Figure 2 shows the results when using data from the second wave of our survey only. Interestingly, neither affectedness nor mortality anxiety are significantly related to changes in public funding. Hypotheses 1 and 2 based on a pluralist perspective on funding changes are, therefore, not supported.
Coefficient plots of regressions with 2021 measures.
Notes: Results of two ordered logistic regressions on changes in public funding. Coefficients and 95/90 percent confidence intervals. N = 314 (model 1) and N = 309 (model 2). Coefficients not shown for: age; fixed effect for country (see Appendix, Table C1, models 1 and 2, for full results). Organization type and Resources are categorical variables with the reference categories: “Business groups & firms” and “Low resources,” respectively.
In contrast, Figure 2 does provide support for Hypotheses 3a and 3b formulated based on rent-seeking theories. First, the frequency of lobbying on Covid-related policies (reporting period: June 2020–June 2021) is significantly and positively related to changes in public funding in one of the two models (model 1; p = 0.013). Consequently, there is partial support for Hypothesis 3a. When looking explicitly at fund-seeking activities, the evidence is much clearer: both the investment of resources in fund-seeking (operationalization 1) and the frequency of activities to seek funding (operationalization 2) are positively and significantly related to changes in funding (p = 0.01 and p < 0.001), supporting Hypothesis 3b.
In addition, several of the included control variables have significant effects. First, the share of the normal budget that comes from public funding is related to changes in public funding, though at the borderline of conventional levels of significance (model 1: p = 0.043, model 2 p = 0.09). This is in line with previous researchFootnote 66 and arguably further supports a rent-seeking story, suggesting that those that have established relationships as recipients are more successful in expanding these when new funds become available.
Furthermore, we see, perhaps surprisingly, that both associations of professionals and labor unions, as well as NGOs and citizen groups are significantly less likely to increase their public funding compared to business associations and firms (p < 0.05 in all models), whereas there are no significant differences for organizations at different levels of public affairs resources.Footnote 67
Figure 3 adds to this evidence by including data from the first wave of our survey in 2020.Footnote 68 This accounts for a potential time-lag that may exist between the experience of organizational grievances and the allocation of funding. Yet, based on the 2020 affectedness and mortality anxiety measures, there is again no support for H1 and H2. Quite to the contrary, Figure 3 documents a significant negative relationship between perceived affectedness early in the pandemic and reported changes in public funding in the subsequent year (p = 0.023 and p = 0.041). This is a potentially worrying finding, given it seems that public funding was directed away from organizations that felt especially hard-hit.Footnote 69
Coefficient plots of regressions with 2020 measures.
Notes: Results of two ordered logistic regressions on changes in public funding. Coefficients and 95/90 percent confidence intervals. N = 198 (model 1) and N = 194 (model 2); reduced N because of relying on two survey waves. Coefficients not shown for: age; fixed effect for country (see Appendix C Table C1, models 3 and 4, for full results). Organization type and Resources are categorical variables with the reference categories: “Business groups & firms” and “Low resources,” respectively.
At the same time, the 2020 data provides clear support for Hypothesis 3a whereby more frequent early lobbying activity during the pandemic (reporting period: March 2020–June 2020) is significantly positively related to positive changes in public funding (p = 0.029 and p = 0.017). The models also confirm the support of Hypothesis 3b with findings for both operationalizations holding in this model specification (p < 0.001). The patterns in the control variables, however, look different. While budget share remains weakly significant (p = 0.044 and p = 0.052), the group type differences disappear.
Interaction effects (H4–H5)
Our last two hypotheses interact the rent-seeking and disturbance stories. Funding changes might be best understood by need-signaling lobbying efforts. Put simply, the lack of evidence in support of the disturbance theory could be explained by the fact that lobbying and fund-seeking activities interact with the levels of affectedness or fears of organizational death. It could be that only highly affected or worried organizations which however still manage to lobby extensively (for funding), can secure increases in public funding and therefore resolve their grievances.
We test this line of argument in a series of interaction models based on our wave 2 data (see results in table-form in Appendix D, Table D.1). In these models we find no support for an interaction between affectedness and the activity measures (see also Figures D.1 and D.2 in Appendix D). There is, however, evidence of an interaction between mortality anxiety and lobbying or funding-related lobbying. As Models 3 and 4 in Table D1 show, there are significant interactions between levels of mortality anxiety and lobbying activity (Model 3, p = 0.033 and p = 0.049) and interactions between mortality anxiety and investment in fund-seeking activities are at a borderline level of statistical significance (Model 4, p = 0.068 and p = 0.097).
Figures 4 and 5 plot these interactions for models in Table D1 showing significant interaction effects. Figure 4 confirms an increasing probability of public funding increase for highly worried organizations as they increase their lobbying activity, but not for organizations with low mortality anxiety (in the latter case, the slope is negative). Similarly, Figure 5 shows that at low levels of anxiety, additional investment in fund-seeking activity is not associated with a higher probability of funding increase, whereas there is a clear increase for more anxious groups (interestingly, especially at medium levels of anxiety). This provides a silver lining to our main results by showing that lobbying and fund-seeking activities might still be a crucial way of signaling anxiety and need to decision-makers and thereby increase public funding. Yet, while nuancing the rent-seeking story, Figures 4 and 5 still show that it is those organizations at medium and high levels of anxiety that lobby the most, that are more likely to attain increases in public funding. Moreover, given that we do not find any evidence for such an interaction between affectedness and lobbying activities, we conclude that there is only limited evidence across our analyses that public funding changes experienced by organizations during the pandemic mirrored organizations’ perceived need during this time.
Predicted probabilities of funding increases, based on Model 3 Table D1, N = 314.
Predicted probabilities of funding increases, based on Model 4 Table D1, N = 314.
Conclusions
In this paper, we set out to assess the explanatory power of theories of rent-seeking and pluralist accounts of disturbance responsiveness in context of self-reported changes in public funding of interest organizations during the Covid-pandemic in Europe. The patterns we uncover based on two survey waves are more consistent with theories of rent seeking, where, holding need and mortality anxiety constant, more lobbying, and especially lobbying to extract resources is associated positively with changes in funding.
After a series of publications documenting that access and influence in viral lobbying took the concerns of affected organizations seriously,Footnote 70 these findings entail a vital qualification. When it comes to the large sums of public spending during the pandemic, we find no evidence that highly affected organizations were its main beneficiaries. Instead, those that lobbied intensively and invested time and resources in seeking funding were able to increase the public funding share of their budgets. These patterns mirror fears of inefficiency and welfare losses in lobbying, which political economists have been concerned about for over half a century.Footnote 71 In the case of Covid-19, studies pointing at these distortions have started to emerge.Footnote 72 However, empirical analyses, especially of interest group politics in Europe, do not pay enough attention to this aspect of interest representation.Footnote 73
Still, deducing the normative implications of these patterns is not straightforward. As we also show, there is some evidence for an interaction between the explanatory factors highlighted by theories of rent seeking and organizational disturbances. Increases in public funding during the pandemic were responsive to signals from organizations that they were in demand of funding, which especially worked for organizations that were more worried about their continued existence. This point also raises the question of whether the normative undertone of theories on rent-seeking is always warranted. Lobbying and fund-seeking activities can also have a productive role: They can be a way for decision-makers to identify organizations in need. These mechanisms do become problematic, however, when those that need funding the most cannot lobby, or when public funding agencies are unable to distinguish pull-signals from organizations that are in dire need—perhaps unable to survive without help – from those seeking to capture income. While our analysis provides tentative evidence that the ability to lobby and seek funding played a bigger role in funding changes in Europe than experienced organizational need (reported by organizations in our survey), future research could build on our work and continue with an empirical and normative evaluation of how the ability to lobby (for funds) might be a precondition for attaining them.
We believe such studies are crucial when scholarship tries to contribute to debates around the more effective allocation of public resources. Our arguments—paired with our results—come down to this: Lobbying has the potential to play a fruitful role as a signal of need when funds are allocated. Yet, in practice, policymakers do not seem to be sufficiently equipped to evaluate the quality of that signal. As a result, public funding is likely to favor rent-seekers, as well as organizations that are in need of support during a crisis. We believe that interventions to address this must take both pull and push forces into account. First, the question of how policymakers process and quality check lobbying information (at the pull side) is too rarely raised explicitly, and even more rarely studied empirically. We need to know more about how to equip public officials with tools to evaluate lobbying messages, including how they use internal information capacity, external experts, and how different formats of stakeholder consultations might help verify or prioritize different accounts of needs in society. Second, the question of how lobbyists self-regulate when deciding whether and how to signal (the push side) is also important. Interview evidence during the pandemic suggests that some organizations paused or down-prioritized their lobbying when health considerations were most pressing, because they felt that pushing their message then would not be going in the right direction.Footnote 74 Whether an ethical concern, or a strategic evaluation of what is deemed appropriate, understanding the role of lobbying in correctly informing policymakers about organizational grievances requires a closer study of when organizations deem it appropriate to signal or not.
Of course, we acknowledge that we cannot generalize too broadly based on one rather exceptional case. One could argue that Covid-19 is a most likely case for rent-seeking, where sudden public cash flows in circumstances of uncertainty are ideal for rent-seekers.Footnote 75 If so, our findings could be exceptional, magnifying otherwise rare or atypical mechanisms. Yet, there are also important reasons to think of the pandemic as a less likely case for observing such rent-seeking dynamics. This is because pandemic politics, including the availability of public funding, was a highly salient issue, thus expectably subject to more public scrutiny and “noisy politics” than the average budgetary decision. Moreover, pandemic funding involved an immediate threat to citizen health and economic well-being of organizations and entire countries. For this reason, we might expect additional incentives for decisionmakers to allocate funding towards the alleviation of threats (in line with disturbance theory), rather than towards “rent-seekers,” who “want” but do not “need” the funding. Future research should therefore further probe such competitive dynamics in other contexts, including less salient budgetary decisions.
Finally, our survey-based data also have clear limits. First, our measures capture diverse forms and uses of funding—ranging from membership services and health protocol information to staff costs and organizational maintenance—making normative interpretations contingent on funding type. Second, our ordinal measure of public funding changes was only able to distinguish increases, decreases and unchanged government funding. Thus, the analysis cannot distinguish small increases from a substantial boost in new funding, which may mask meaningful differences in lobbying effectiveness. Future work should explore the mechanisms we outline, using observational data for cases where information on the magnitude of funding is available, such as in the EU’s Recovery and Resilience Facility (RRF) instrument. We also see promise in survey experiments, or in-depth case studies to understand how organizations choose to signal need, and how policymakers interpret and cross-check these signals. We believe that these questions revolving around the role of lobbying in the distribution of public funding are of prime importance both in contexts of high public investment and diverse “disturbances” faced by civil society organizations in the present decades.
Supplementary material
The supplementary material for this article can be found at https://doi.org/10.1017/bap.2026.10024.
Acknowledgements
The authors would like to thank their respective departments and research groups, where they received excellent comments on earlier versions of this paper. They are also grateful to the participants of the European Consortium for Political Research General Conference in Dublin 2024, the Danish Political Science Association General Conference 2024, and the Copenhagen Business School (CBS), Money in Politics Conference 2024, PAT seminar at Lund University and Department Seminar at Linnæus University, where the paper received valuable feedback. They would also like to thank Anne Binderkrantz, Daniel Naurin, Andrea Pritoni and all others who supported the InterCov (Interest Representation during the Coronavirus Crisis) project, for instance by making interest group samples available; Last but not least, the authors would also like to thank all respondents in their cross-national survey, and their team of excellent student assistants who supported this research.
Funding statement
This research was supported by Danish Society for Education and Business (DSEB) [Tietgenprisen awarded to Wiebke Marie Junk in 2020].
Competing interests
No potential conflicts of interests are reported by the authors.
Data availability statement
Upon eventual publication of this article, data and replication files supporting the findings will be made publicly available.
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