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The Market for ‘Pull’ on Capitol Hill

Posted By Walter Olson On September 28, 2010 @ 8:40 am In Government and Politics | Comments Disabled

Economists can actually measure the value of insider connections:

[L]obbyists connected to US Senators suffer an average 24% drop in generated revenue when their previous employer leaves the Senate. The decrease in revenue is out of line with pre-existing trends, it is discontinuous around the period in which the connected Senator exits Congress and it persists in the long-term. … Measured in terms of median revenues per ex-staffer turned lobbyist, this estimate indicates that the exit of a Senator leads to approximately a $177,000 per year fall in revenues for each affiliated lobbyist.

The fall is steeper, the researchers find, when the departing member of Congress sat on a powerful committee such as Appropriations, Senate Finance, or (on the House side) Ways and Means. Lobbyists who are ex-staffers are also more likely to quit the lobbying business once “their” member departs office. Incidentally, actual per-lobbyist revenue is lower than you might assume from the above figures, because many lobbying contracts are shared out among several participants with each individual getting only a portion of the proceeds. (Jordi Blanes i Vidal, Mirko Draca, and Christian Fons-Rosen, “Revolving Door Lobbyists [1],” via Alex Tabarrok [2]).

If you needed another reason to vote against that unsatisfactory incumbent this fall, reflect that by doing so you’ll also be dimming the stars of his or her unsatisfactory ex-staffers.


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URLs in this post:

[1] Revolving Door Lobbyists: http://cep.lse.ac.uk/pubs/download/dp0993.pdf

[2] Alex Tabarrok: http://www.marginalrevolution.com/marginalrevolution/2010/09/the-value-of-political-connections.html

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