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Lobbying dominates corporate political spending, but comprehensive studies of the benefits accrued are scarce. Using a dataset of all U.S. firms with publicly available financial statements, we delve into the tax benefits obtained from lobbying. Firms that spend more on lobbying in a given year pay lower effective tax rates in the next year. Increasing registered lobbying expenditures by 1% appears to lower effective tax rates by somewhere in the range of 0.5 to 1.6 percentage points for the average firm that lobbies. While individual firms amass considerable benefits, the costs of lobbying‐induced tax breaks appear modest for the government.

On May 30, 2019, an unlikely agreement between Rep. Alexandria Ocasio-Cortez and Sen. Ted Cruz appeared to take place on Twitter. Ocasio-Cortez tweeted that members of Congress should be banned from becoming corporate lobbyists or should at least be subjected to a waiting period following their congressional service. Ocasio-Cortez cited a statistic from Public Citizen, in which the advocacy group reported that among former Congress members who move to jobs outside of politics, nearly 60% start lobbying or otherwise influencing federal policy. After Cruz weighed in expressing his agreement with Ocasio-Cortez's proposal, Ocasio-Cortez proposed a deal to co-lead a bill with Cruz. Cruz's response? "You're on."

This study explains the observed repeated personal interactions between lobbyists and policymakers. The analysis uses a dynamic model of commercial lobbying in which citizens may hire lobbyists to present policy proposals on their behalf to policymakers. It is shown that repeated interactions with lobbyists simplify a policymaker's information problem in the presence of unverifiable information provision and allow a solution to their contracting problem. The welfare implications of these interactions depend on whether the policymakers' information or contracting problem predominates. Further, the policymaker's information problem and financial contributions may actually improve social welfare in comparison to the full information outcome.

AbstractHow do interest groups decide which member of Congress to target when decisions are made collectively? Do lobbying strategies change as legislation advances? Answering these questions is challenging due to a lack of systematic observations of lobbying contacts. I answer these questions using a novel data set constructed from reports submitted by lobbyists on behalf of South Korea regarding its free trade agreement with the United States for 10 years. I show that a diverse set of politicians are contacted but the timing, intensity, and strategy of lobbying contacts vary by politicians' institutional positions as well as their predisposed preferences for free trade.