_ Revolving Door Lobbyists _

_____________________________Revolving DoorLobbyists_____________________________ JordiBlanesi Vidal Mirko Draca Christian Fons-Rosen

GROWTH OF FEDERAL LOBBYING $1.44 billion in 1998 to $3.3 billion in 2008 Based on Lobbying Disclosure Act (LDA) reports. COMPARISON WITH CAMPAIGN SPENDING 2008 Cycle Senate $375 million Congress $760 million Presidential $1.1 billion

“REVOLVING DOOR” GOVERNMENT PRIVATE SECTOR White House Executive Corporate Sector House & Senate Lobbying

LDA Coverage: Money spent in support of lobbying contacts (personnel expenses, preparation for contacts, background research, public events)

TABLE 1: REVENUE SHARES BY TYPE (continued) LDA Coverage: Money spent in support of lobbying contacts (personnel expenses, preparation for contacts, background research, public events)

PROBLEMS WITH REVOLVING DOOR • POLITICAL SELECTION: Post-govt windfalls may • affect the type of people choosing to work in politics (Besley 1995, Keane and Merlo 2007). • 2.CAREER CONCERNS: Actions of currently serving • officials may be influenced by the prospect of • post-govt jobs. • ACCESS: Access and influence can be ‘bought’. Connections can influence policy decisions • (Igan and Mishra 2011). …this leads to two views on the work of lobbyists.

HUMAN CAPITAL / ‘EXPERTISE’ VIEW “There is nothing insidious about medical companies hiring former staffers. The technical processes of the House and the Senate are not intuitive or widely known. Like with any service, people who have experience are going to be valuable to people who don’t. ” William K Wynne (Baucus ex-Staffer).

‘CONNECTIONS’ VIEW • 34 out of the Top 50 lobbyists have Federal government • Experience. • “(Nancy) Taylor is a onetime health-policy director on • Senator Orrin Hatch’s Labor and Human Resource • Committee, which has jurisdiction over much drug-patent • legislation and Food-and-drug laws (..) Colleagues • say that as long as Hatch is in the Senate, • Taylor will continue to bring in business” • Eisler (2007), Washingtonian Magazine

EMPIRICAL STRATEGY • Pit = Connections to serving Congressmen (count). • Inclusion of ai lobbyist fixed effects. • Sample of ex-Congressional staffers only • (comparison group). • Inclusion of gt group trends by party & chamber • affiliation (narrows comparison group).

VARIATION AT POLITICIAN LEVEL - 40 senators exit. Approximately half exit due to retirement, rest exit due to electoral defeat or move to another office.

CONCLUSIONS • Empirical • 23% premium associated with specific political connection. • Varies with power of the politician, effect is immediate and persists. • No evidence of anticipation effects. • Unexpected exits have higher effect but not definitive evidence. • Qualitative • Shows that political connections can be traded (biggest market in the world). • Political rents exists and will matter as incentives for selection and career concerns. • New section of political class opened up for analysis (staffers).

_ Revolving Door Lobbyists _