Informational lobbying and commercial diplomacy

Abstract

What determines the content of bilateral diplomacy? I argue that the foreign policy issues prioritized by specific embassies are influenced by their diplomats' sources of information. For evidence, I study the proliferation of American Chambers of Commerce (AmChams)—private interest groups composed of US firms that are operating in specific host states—over the 20th and early 21st centuries. AmChams became key sources of information for US embassies, particularly on issues of relevance to the private sector (such as tax, trade, and investment regulations). Using novel text data from approximately 1500 oral history interviews with former diplomats, and leveraging the institutional structure of diplomatic rotation, I show that diplomats who were exposed to active AmCham branches paid significantly greater attention to commercial issues. These results identify a new avenue through which interest groups can influence foreign policy, help explain the proliferation of probusiness international agreements over the past several decades, and contribute to the growing literature on diplomacy in the international political economy.