Political Concentration: Patterns of Congressional Lobbying in the United States

• In Event: Congress and Policy-Making

Abstract

There is a large literature documenting and explaining increased concentration in the American economy, but the political side of concentration is not as well understood. We explore political concentration through firm-level data documenting all lobbying in the U.S. Congress from 1999 to the present, disclosed pursuant to the Lobbying Disclosure Act. The data help us illuminate the patterns of political participation across time and industries: What portion of economically active firms engage in lobbying? What are the aggregate levels of spending in different industries and by different firms? How has spending changed over time? Are lobbying expenditures correlated with the economic size of the industry? Is the concentration of lobbying activity correlated with the nature of the industry or its level of regulation? Is it correlated with economic concentration? If so, can we tell which precedes which? We provide reliable descriptive statistics speaking to these important questions for the first time. Apart from the difficulty of gathering and organizing the raw data, our contribution is to grapple with the distinctive challenges entailed in conceptualizing and measuring political concentration. For example, unlike with economic concentration, fragmentation of market share in lobbying need not indicate competition (different firms might be lobbying for the same thing), and firms can explicitly coordinate lobbying activities. In addition to analyzing the data, we strive to make sense of parallel trends in political and economic concentration through political-economic theories. Models of public-goods provision help understand lobbying patterns and freeriding. And menu auction models can help understand the normative implications of translating economic into political power.

Authors

• Nolan McCarty

• Sepehr Shahshahani, Fordham Law School