UCLA

This dissertation builds on a classic assertion in Political Science. It is axiomatic that organized interest groups can obtain and protect policies that are generally unpopular or inefficient for the economy as a whole because their opponents cannot overcome their own collective action problems. However, sometimes we do see unexpected policy changes. My work explains how a long-victorious special interest can be overcome by a newly organized (and newly advantaged) rival. In these cases, when facing two potential support groups (or opponents) making opposite policy demands, legislators have to choose which group to please and which to disappoint. The pro-status-quo group uses a strategy that threatens legislators with the loss of votes. To win this competition, pro-change lobbyists have to convince politicians that there is more to gain electorally from voting for the reform than from voting against it. I argue that a new balance in the relative power of competing organized groups is a key component to make politically costly policy changes possible.

I analyze an important and salient policy change in Brazil: a major reform to the pension system that dramatically reduced the special privileges for long-favored (and well-organized) groups of citizens. I present different sources of evidence that complement each other to support my claim. In the first empirical chapter of the dissertation, I analyze the financing sources of pro-change and pro-status-quo groups. I show how those who had succeeded in blocking radical reform in the pension system for decades had become, for the first time, weaker than those who pressured for changes. After collecting data on 100 million individual company contributions to peak business associations and worker contributions to unions (both in the public and private sectors), spanning the period from 2010 to 2020, I use the historic trends to describe how groups that supported changing the pension system were in a much stronger position than groups who preferred the status quo. For decades, the pro-status-quo group consistently collected twice the financial resources amassed by the pro-change groups. However, by the time Congress debated the new pension system, a law change had deprived both groups of most of their funding, but in relative terms, the pro-change groups emerged with 10 times the resources of their opponents, a complete reversal of relative lobbying power.

I analyze complementary data on lobbying credentials distributed by Congress to different organizations and find that they are also consistent with the reversal-of-fortunes story. For over two decades, those who mobilized against pension reforms -- mainly unions -- consistently had received more credentials to enter Congress and lobby lawmakers than other groups. However, after losing most of their financing, the number of unions that received credentials also dropped precipitously. By contrast, the pro-change groups -- mostly business federations -- saw an increase in the number of credentials by the time the pension bill went to the floor of Congress.

This type of observational data only allows me to make descriptive inferences about the relative power of these organizations and probably fails to account for many possible confounders. As researchers, we cannot observe the calculations made by deputies as they make decisions about which side could most affect their future election prospects. To overcome this challenge, I use an original experiment to investigate whether legislators' perceptions of the power of the pro-change group affected their susceptibility to lobbying by them. I partnered with an organization that assembles 51 of the largest companies working in Brazil. On the morning of the voting of the pension bill, I sent messages to the cellphones of all the 513 lawmakers who would vote on the proposal hours later. The treatment message had an extra piece of information reminding deputies of the economic and political power of the organization. If the pro-change groups need to show some power to overcome the impact of the unions ``vote you out" tactic, informing (treated) recipients that the group assembled the largest companies in the country would convey the idea that the drivers of the economy were unanimously behind the pension-system reforms. Indeed, despite waiting until the day of the vote to run the experiment, after weeks and months of lobbying had had a chance to influence legislators, I still found a treatment effect around 4 percentage points, one of the first experimental findings of the effect of lobbying on legislators' behavior.

In the last chapter of the dissertation I tackle the voter side of the puzzle. Do voters actually use information about legislators' policy decisions when choosing how to vote? Is the threat of the ``vote you out" tactic credible? Drawing from three original conjoint experiments, I provide evidence that, in general, voters do not use information about policy when deciding their votes for Congress. In these experiments, I randomly assigned characteristics for two fictional candidates running for Congress, varying information on party, experience, personal brand, and position on policies such as the pension reform. On average, the policy information did not change the probability that a candidate would be chosen by voters. In the pension case, evidence from the conjoint experiments show that the sole exception was that supporters of the Worker's Party (PT) were willing to punish legislators who had voted in favor of changing the rules.