Skip to main content

Lobbying in the United States

  • Chapter
  • First Online:
The Political Economy of Lobbying

Part of the book series: Studies in Public Choice ((SIPC,volume 43))

  • 255 Accesses

Abstract

This chapter reviews the U.S. political institutions relevant for understanding and analyzing lobbying and contribution activities. We provide an overview of legislation regulating lobbying activities and summarize the amount of lobbying expenditures over time. We also describe the legislation surrounding campaign contributions and expenditures and who contributes and how much to federal election campaigns. We report that the empirical evidence is mixed regarding how election outcomes and ballot initiatives respond to campaign expenditures and campaign finance legislation. We then briefly discuss some studies that analyze the effect of lobbying and interest groups providing campaign contributions to politicians that may affect political decisions.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 129.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 169.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    https://www.opensecrets.org

  2. 2.

    https://www.opensecrets.org/federal-lobbying/summary. Accessed: 15 April 2021.

  3. 3.

    https://www.congress.gov/bill/93rd-congress/house-bill/16090

  4. 4.

    http://www.cfinst.org/law/federal.aspx

  5. 5.

    https://www.britannica.com/topic/Bipartisan-Campaign-Reform-Act

  6. 6.

    https://www.fec.gov/legal-resources/court-cases/mcconnell-v-fec/

  7. 7.

    https://www.fec.gov/help-candidates-and-committees/filing-ssf-reports/multicandidate-status/#:~:text=A%20PAC%20generally%20qualifies%20as,at%20least%20five%20federal%20candidates.

  8. 8.

    https://www.opensecrets.org/outsidespending/summ.php?cycle=2020&disp=O&type=S&chrt=P

  9. 9.

    https://www.fec.gov/data/browse-data/?tab=candidates

  10. 10.

    This term describes an organization defined under sect. 501(c)(4) of the Internal Revenue Code. For a complete list of organizations and their exemptions, see https://www.irs.gov/charities-and-nonprofits

  11. 11.

    Further information regarding the types of outside spending groups and their requirements for disclosure and use of funds can be found at: https://www.opensecrets.org/outsidespending/rules.php

  12. 12.

    Related work suggests that moneyed interests purchase time from Congressmen, that is, their legislative involvement (Hall & Wayman, 1990)

  13. 13.

    An example of theoretical work on buying a super majority in Congress is Groseclose and Snyder (1996). Stratmann (1992) documents that farm groups contribute most to the legislator with the median farm constituency, lending support to the hypothesis that interest groups contribute strategically as to have a majority of legislators voting in their interest.

  14. 14.

    While most studies consider PAC contributions a few studies consider contributions by individuals to election campaigns. Exceptions are Barber et al. (2017), Bonica (2016), Richter and Werner (2017), and Li (2018).

  15. 15.

    The “Jeffords effect” is named for a Vermont Senator, Jim Jeffords, who left the Republican Party in 2001 to become independent and caucus with the Democrats, changing the control of the Senate from a Republican to Democratic majority. This was the first time a party switch of a Senator changed the party control in the U.S. Senate.

  16. 16.

    https://www.opensecrets.org/pres16

  17. 17.

    https://www.opensecrets.org/elections-overview/cost-of-election?display=T

  18. 18.

    https://ballotpedia.org/Ballot_measure_campaign_finance,_2020

References

  • Abramowitz, A. I. (1988). Explaining senate election outcomes. The American Political Science Review, 82(2), 385–403. https://doi.org/10.2307/1957392

    Article  Google Scholar 

  • Abramowitz, A. I. (1991). Incumbency, campaign spending, and the decline of competition in US house elections. The Journal of Politics, 53(1), 34–56. https://doi.org/10.2307/2131719

    Article  Google Scholar 

  • Aggarwal, R. K., Meschke, F., & Wang, T. Y. (2012). Corporate political donations: Investment or agency? Business and Politics, 14(1), 1–38. https://doi.org/10.1515/1469-3569.1391

    Article  Google Scholar 

  • Ainsworth, S. (1993). Regulating lobbyists and interest group influence. The Journal of Politics., 55(1), 41–56. https://doi.org/10.2307/2132227

    Article  Google Scholar 

  • Alexander, R., Mazza, S. W., & Scholz, S. (2009). Measuring rates of return on lobbying expenditures: An empirical case study of tax breaks for multinational corporations. Journal of Law and Politics, 25, 401–457.

    Google Scholar 

  • Ansolabehere, S. D., de Figueiredo, J. M., & Snyder, J. M. (2003). Why is there so little money in U.S. politics? The Journal of Economic Perspectives, 17(1), 105–130.

    Article  Google Scholar 

  • Ashworth, S. (2006). Campaign finance and voter welfare with entrenched incumbents. The American Political Science Review, 100(1), 55–68.

    Article  Google Scholar 

  • Austen-Smith, D. (1987). Interest groups, campaign contributions, and probabilistic voting. Public Choice, 54(2), 123–139.

    Article  Google Scholar 

  • Austen-Smith, D. (1993). Information and influence: Lobbying for agenda and votes. American Journal of Political Science, 37(3), 799–833. https://doi.org/10.2307/2111575

    Article  Google Scholar 

  • Bailey, M. (2002). Money and representation: An exploration in multiple dimensions with informative campaigns. Georgetown University.

    Google Scholar 

  • Ballot Measure Campaign Finance. (2020). Accessed December 14, 2021, from https://ballotpedia.org/Ballot_measure_campaign_finance,_2020.

  • Barber, M. J., Canes-Wrone, B., & Thrower, S. (2017). Ideologically sophisticated donors: Which candidates do individual contributors finance? American Journal of Political Science, 61(2), 271–288.

    Article  Google Scholar 

  • Bertrand, M., Bombardini, M., & Trebbi, F. (2014). Is it whom you know or what you know? An empirical assessment of the lobbying process. The American Economic Review, 104(12), 3885–3920.

    Article  Google Scholar 

  • Bombardini, M., & Trebbi, F. (2020). Empirical models of lobbying. Annual Review of Economics, 12, 391–413.

    Article  Google Scholar 

  • Bonica, A. (2016). Avenues of influence: On the political expenditures of corporations and their directors and executives. Business and Politics, 18(4), 367–394.

    Article  Google Scholar 

  • Bronars, S. G., & Lot, J. R., Jr. (1997). Do campaign donations alter how politicians vote? Or, do donors support candidates who value the same things that they do? The Journal of Law and Economics, 40(2), 317–350. https://doi.org/10.1086/467375

    Article  Google Scholar 

  • Che, Y. K., & Gale, I. L. (1998). Caps on political lobbying. The American Economic Review, 88(3), 643–651.

    Google Scholar 

  • Chen, H., Parsley, D., & Yang, Y. W. (2015). Corporate lobbying and firm performance. Journal of Business Finance and Accounting, 42(3–4), 444–481.

    Article  Google Scholar 

  • Coate, S. (2004a). Pareto-improving campaign finance policy. The American Economic Review, 94(3), 628–655.

    Article  Google Scholar 

  • Coate, S. (2004b). Political competition with campaign contributions and informative advertising. Journal of the European Economic Association, 2(5), 772–804.

    Article  Google Scholar 

  • Coates, J. C., IV. (2012). Corporate politics, governance, and value before and after citizens united. Journal of Empirical Legal Studies, 9(4), 657–696.

    Article  Google Scholar 

  • Cooper, M. J., Gulen, H., & Ovtchinnikov, A. V. (2010). Corporate political contributions and stock returns. The Journal of Finance, 65(2), 687–724.

    Article  Google Scholar 

  • De Figueiredo, J. M., & Richter, B. K. (2014). Advancing the empirical research on lobbying. Annual Review of Political Science, 17, 163–185.

    Article  Google Scholar 

  • de Figueiredo, J. M., & Silverman, B. S. (2006). Academic earmarks and the returns to lobbying. The Journal of Law and Economics, 49(2), 597–625. https://doi.org/10.1086/508248

    Article  Google Scholar 

  • Drazen, A., Limão, N., & Stratmann, T. (2004). Political contribution caps and lobby formation: Theory and evidence. Journal of Public Economics, 91(3–4), 723–754.

    Google Scholar 

  • Dwyer, K., & Stratmann, T. (2022). Effect of campaign contributions on legislator behavior: Intra dairy industry interest group competition.

    Google Scholar 

  • Felli, L., & Merlo, A. (2006). Endogenous lobbying. Journal of the European Economic Association, 4(1), 180–215.

    Article  Google Scholar 

  • Fowler, A., Garro, H., & Spenkuch, J. L. (2020). Quid pro quo? Corporate returns to campaign contributions. The Journal of Politics, 82(3), 844–858.

    Article  Google Scholar 

  • Garret, E., & Gerber, E. (2001). Money in the initiative and referendum process: Evidence of its effects and prospects for reform. In M. D. Waters (Ed.), Battle over citizen law-making (pp. 73–96). Carolina Academic Press.

    Google Scholar 

  • Gerber, A. (1998). Estimating the effect of campaign spending on senate election outcomes using instrumental variables. The American Political Science Review, 92(2), 401–411. https://doi.org/10.2307/2585672

    Article  Google Scholar 

  • Green, D. P., & Krasno, J. S. (1988). Salvation for the spendthrift incumbent: Re-estimating the effects of campaign spending in house elections. American Journal of Political Science, 32(4), 884–907. https://doi.org/10.2307/2111193

    Article  Google Scholar 

  • Grier, K. B. (1989). Campaign spending and senate elections, 1978–84. Public Choice, 63(3), 201–219.

    Article  Google Scholar 

  • Grier KB, Grier R, Mkrtchian G (2022) Campaign contributions and roll-call voting in the US house of representatives: The case of the sugar industry. American Political Science Review. Published online: 02 May 2022: 1–7.

    Google Scholar 

  • Grier, K. B., Munger, M. C., & Roberts, B. E. (1994). The determinants of industry political activity, 1978–1986. American Political Science Review, 88(4), 911–926. https://doi.org/10.2307/2082716

    Article  Google Scholar 

  • Groseclose, T., & Snyder, J. M. (1996). Buying supermajorities. The American Political Science Review, 90(2), 303–315. https://doi.org/10.2307/2082886

    Article  Google Scholar 

  • H.R. 16090 – Federal Election Campaign Act Amendments. Accessed 12 June 2022., from https://www.congress.gov/bill/93rd-congress/house-bill/16090.

  • Hadani, M., & Schuler, D. A. (2013). In search of El Dorado: The elusive financial returns on corporate political investments. Strategic Management Journal, 34(2), 165–181.

    Article  Google Scholar 

  • Hall, R. L., & Deardorff, A. V. (2006). Lobbying as legislative subsidy. American Political Science Review, 100(1), 69–84.

    Article  Google Scholar 

  • Hall, R. L., & Wayman, F. W. (1990). Buying time: Moneyed interests and the mobilization of bias in congressional committees. American Political Science Review, 84(3), 797–820. https://doi.org/10.2307/1962767

    Article  Google Scholar 

  • Hersch, P., Netter, J. M., & Pope, C. (2008). Do campaign contributions and lobbying expenditures by firms create “political” capital? Atlantic Economic Journal, 36(4), 395–405.

    Article  Google Scholar 

  • Hill, M. E., Kelly, G. W., Lockhart, G. B., & Van Ness, R. A. (2013). Determinants and effects of corporate lobbying. Financial Management, 42(4), 931–957.

    Article  Google Scholar 

  • Hinich, M. J., & Munger, M. C. (1989). Political investment, voter perceptions, and candidate strategy: An equilibrium spatial analysis. In P. C. Ordeshook (Ed.), Models of strategic choice in politics (pp. 49–68). University of Michigan Press.

    Google Scholar 

  • Holyoke, T. T. (2020). Interest groups and lobbying: Pursuing political interests in America (2nd ed.). Routledge. https://doi.org/10.4324/9781003041795

    Book  Google Scholar 

  • Houser, D., Morton, R., & Stratmann, T. (2011). Turned on or turned out? Campaign advertising, information and voting. European Journal of Political Economy, 27(4), 708–727.

    Article  Google Scholar 

  • Houser, D., & Stratmann, T. (2008). Selling favors in the lab: Experiments on campaign finance reform. Public Choice, 136(1/2), 215–239. https://doi.org/10.1007/S11127-008-9292-Z

    Article  Google Scholar 

  • Igan, D., Mishra, P., & Tressel, T. (2012). A fistful of dollars: Lobbying and the financial crisis. NBER Macroeconomics Annual, 26(1), 195–230. https://doi.org/10.1086/663992

    Article  Google Scholar 

  • Jacobson, G. C. (1978). The effects of campaign spending in congressional elections. American Political Science Review, 72(2), 469–491. https://doi.org/10.2307/1954105

    Article  Google Scholar 

  • Jayachandran, S. (2006). The Jeffords effect. The Journal of Law and Economics, 49(2), 397–425. https://doi.org/10.1086/501091

    Article  Google Scholar 

  • Kalla, J. L., & Broockman, D. E. (2016). Campaign contributions facilitate access to congressional officials: A randomized field experiment. American Journal of Political Science, 60(3), 545–558.

    Article  Google Scholar 

  • Kang, K. (2016). Policy influence and private returns from lobbying in the energy sector. The Review of Economic Studies, 83(1), 269–305.

    Article  Google Scholar 

  • Kerr, W. R., Lincoln, W. F., & Mishra, P. (2013). The dynamics of firm lobbying. The American Economic Journal: Economic Policy, 6(4), 343–379.

    Google Scholar 

  • Knight, B. (2006). Are policy platforms capitalized into equity prices? Evidence from the bush/Gore 2000 presidential election. Journal of Public Economics, 90(4–5), 751–773.

    Article  Google Scholar 

  • Kroszner, R. S., & Stratmann, T. (1998). Interest-group competition and the organization of congress: Theory and evidence from financial services’ political action committees. The American Economic Review, 88(5), 1163–1187.

    Google Scholar 

  • LaPira, T. M., & Thomas, H. F. (2017). The model: Lobbying as political insurance. In Revolving door lobbying: Public service, private influence, and the unequal representation of interests (pp. 52–82). University Press of Kansas.

    Chapter  Google Scholar 

  • Lenway, S. A., Jacobson, C. K., & Goldstein, J. (1990). To lobby or to petition: The political environment of U.S. trade policy. Journal of Management, 16(1), 119–134.

    Article  Google Scholar 

  • Levitt, S. D. (1994). Using repeat challengers to estimate the effect of campaign spending on election outcomes in the U.S. House. Journal of Political Economy, 102(4), 777–798.

    Article  Google Scholar 

  • Li, Z. (2018). How internal constraints shape interest group activities: Evidence from access-seeking PACs. American Political Science Review, 112(4), 792–808.

    Article  Google Scholar 

  • Lohmann, S. (1995). Information, access, and contributions: A signaling model of lobbying. Public Choice, 85(3/4), 267–284.

    Article  Google Scholar 

  • Lowenstein, D. H. (1981). Campaign spending and ballot propositions: Recent experience, public choice theory and the first amendment. UCLA Law Review, 29, 505.

    Google Scholar 

  • Matter, U., Roberti, P., & Slotwinski, M. (2019). Vote buying in the US Congress. In ZEW-Centre for European Economic Research Discussion Paper (pp. 19–052).

    Google Scholar 

  • Milyo, J., Primo, D., & Groseclose, T. (2000). Corporate PAC campaign contributions in perspective. Business and Politics, 2(1), 75–88.

    Article  Google Scholar 

  • Moon, W. (2006). The paradox of less effective incumbent spending: Theory and tests. British Journal of Political Science, 36(4), 705–721.

    Article  Google Scholar 

  • Morton, R., & Cameron, C. (1992). Elections and the theory of campaign contributions: A survey and critical analysis. Economics and Politics, 4(1), 79–108.

    Article  Google Scholar 

  • Ortuno-Ortín, I., & Schultz, C. (2005). Public funding of political parties. Journal of Public Economic Theory, 7(5), 781–791.

    Article  Google Scholar 

  • Potters, J., Sloof, R., & van Winden, F. (1997). Campaign expenditures, contributions and direct endorsements: The strategic use of information and money to influence voter behavior. European Journal of Political Economy, 13(1), 1–31.

    Article  Google Scholar 

  • Powell, E. N., & Grimmer, J. (2016). Money in exile: Campaign contributions and committee access. The Journal of Politics, 78(4), 974–988.

    Article  Google Scholar 

  • Prat, A. (2002a). Campaign advertising and voter welfare. The Review of Economic Studies, 69(4), 999–1017.

    Article  Google Scholar 

  • Prat, A. (2002b). Campaign spending with office-seeking politicians, rational voters, and multiple lobbies. Journal of Economic Theory, 103(1), 162–189.

    Article  Google Scholar 

  • Rasmusen, E. (1993). Lobbying when the decision maker can acquire independent information. Public Choice, 77(4), 899–913.

    Article  Google Scholar 

  • Richter, B. K., Samphantharak, K., & Timmons, J. F. (2009). Lobbying and taxes. American Journal of Political Science, 53(4), 893–909.

    Article  Google Scholar 

  • Richter, B. K., & Werner, T. (2017). Campaign contributions from corporate executives in lieu of political action committees. The Journal of Law Economics and Organization, 33(3), 443–474.

    Article  Google Scholar 

  • Rogers, T., & Middleton, J. (2015). Are ballot initiative outcomes influenced by the campaigns of independent groups? A precinct-randomized field experiment showing that they are. Political Behavior, 37(3), 567–593.

    Article  Google Scholar 

  • Roscoe, D. D., & Jenkins, S. (2005). A meta-analysis of campaign contributions’ impact on roll call voting. Social Science Quarterly, 86(1), 52–68.

    Article  Google Scholar 

  • Rubenzer, T. (2011). Campaign contributions and U.S. foreign policy outcomes: An analysis of Cuban American interests. American Journal of Political Science, 55(1), 105–116.

    Article  Google Scholar 

  • Stratmann, T. (1991). What do campaign contributions buy? Deciphering causal effects of money and votes. Southern Economic Journal, 57(3), 606–620. https://doi.org/10.2307/1059776

    Article  Google Scholar 

  • Stratmann, T. (1992). Are contributors rational? Untangling strategies of political action committees. Journal of Political Economy, 100(3), 647–664.

    Article  Google Scholar 

  • Stratmann, T. (1998). The market for congressional votes: Is timing of contributions everything? The Journal of Law and Economics, 41(1), 85–114. https://doi.org/10.1086/467385

    Article  Google Scholar 

  • Stratmann, T. (2002). Can special interests buy congressional votes? Evidence from financial services legislation. The Journal of Law and Economics, 45(2), 345–373. https://doi.org/10.1086/340091

    Article  Google Scholar 

  • Stratmann, T. (2005). Some talk: Money in politics. A (partial) review of the literature. Public Choice, 124(1/2), 135–156.

    Article  Google Scholar 

  • Stratmann, T. (2009). How prices matter in politics: The returns to campaign advertising. Public Choice, 140(3/4), 357–377.

    Article  Google Scholar 

  • Stratmann, T., & Aparicio-Castillo, F. (2006). Competition policy for elections: Do campaign contribution limits matter? Public Choice, 127(1/2), 177–206.

    Article  Google Scholar 

  • Stratmann, T., & Verret, J. W. (2015). How does corporate political activity allowed by citizens united v. Federal Election Commission affect shareholder wealth? Journal of Law and Economics, 58(3), 545–559.

    Article  Google Scholar 

  • Straus, J. R. (2015). The lobbying disclosure act at 20: Analysis and issues for congress. Congressional Research Service, 1, 1–42.

    Google Scholar 

  • Tullock, G. (1967). The welfare costs of tariffs, monopolies, and theft. Economic Inquiry, 5(3), 224–232.

    Article  Google Scholar 

  • Tullock, G. (1971). The cost of transfers. Kyklos, 24(4), 629–643.

    Article  Google Scholar 

  • United States v. Harriss, 347 U.S. 612 (1954).

  • United States Constitution. 2 U.S.C. §1602 (8)(A)

    Google Scholar 

  • United States Constitution. 2 U.S.C. Ch. §307 (8)(A): REGULATION OF LOBBYING From Title 2—THE CONGRESS Section 266, act Aug. 2, 1946, ch. 753, title III, §307, 60 Stat. 841

    Google Scholar 

  • Wittman, D. (2007). Candidate quality, pressure group endorsements and the nature of political advertising. European Journal of Political Economy, 23(2), 360–378.

    Article  Google Scholar 

  • Wright, J. R. (1990). Contributions, lobbying, and committee voting in the U.S. house of representatives. The American Political Science Review, 84(2), 417–438. https://doi.org/10.2307/1963527

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Thomas Stratmann .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2023 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Stratmann, T., Dozier, A. (2023). Lobbying in the United States. In: Mause, K., Polk, A. (eds) The Political Economy of Lobbying. Studies in Public Choice, vol 43. Springer, Cham. https://doi.org/10.1007/978-3-031-44393-0_14

Download citation

Publish with us

Policies and ethics