When it comes to lobbying, it’s not what you know, but who you know that matters, according to new research from the University of British Columbia and the University of Chicago’s Booth School of Business.
Using 1999-2008 data, researchers found that U.S. federal lobbyists tend to work on the same issues as the politicians they know, and will follow a politician when he or she gets reassigned to a new congressional committee, says the study. The research also revealed that clients tend to pay more for lobbyists who are well connected.
“A lobbyist working on health issues who is connected to a politician assigned to the Health Committee is likely to start working on finance issues if that politician is re-assigned to the Committee on Finance,” says Matilde Bombardini, a professor in the Department of Economics at UBC who worked on this study.
Over the last decade, federal lobbying has grown dramatically and is now a $3.5-billion a year industry. According to Bombardini, the findings contrast with statements by the American League of Lobbyists and previous research that emphasized expertise as the key factor in lobbying.
“As the lobbying industry expands it becomes crucial to understand how it contributes to the legislative output,” says Bombardini, who will present the study to the Canadian Institute for Advanced Research in Toronto later this week. “Do they communicate valuable information to politicians or do they simply provide their clients with access to powerful politicians?”
For the study, Bombardini, along with Marianne Bertrand from the Booth School of Business and Francesco Trebbi from UBC, looked at lobbying reports filed with the Senate Office of Public Records. These reports are filed every six months and name the lobbying firm, the client or organization hiring the lobbyists and the names of the individual lobbyists working on that contract.
The researchers also created a measure of expertise for lobbyists by monitoring how much time they spend on an issue and the range of topics they work on. The researchers were then able to classify a lobbyist as ‘expert’ or ‘well-connected.’
The researchers then used the lobbying reports to monitor how much a client pays a lobbying firm to work on one case. Looking at the average compensation for a single case, lobbying firms were paid four per cent more if they had an expert lobbyist working on the case. But, teams with a well-connected lobbyist were paid eight per cent above the average, twice as high as having an expert.
“Compensation may not reflect lobbyists’ role as experts or simple messengers of information,” says Bombardini. “Their compensation may more directly reflect the reputation, credibility and political savvy lobbyists bring to their job.”