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In US politics, it’s who you know, not what

U. WARWICK (UK) — For political lobbyists in the United States, it pays to have friends in high places.

Published in the journal American Economic Review, a new study calculates the true value of US political lobbyists and shows their revenue falls by 24 percent when their former employer leaves government office.

The study examines the so-called “revolving door” of politics, which refers to the movement of people from government service into lobbying positions.

“We investigated how the revenues of lobbyists who had previously worked in the offices of a member of US Congress were affected when their former employers left office,” says Mirko Draca from the department of economics at the University of Warwick.

“This allowed us to look at the value of ‘what’ and ‘who’ because we evaluated situations in which  knowledge did not change, but connections did.”

The paper found the24 percent fall in revenue was immediate and long-lasting. The relative pay of lobbyists depends on the seniority and committee assignments of the congressional politicians they have worked for in the past.

“Our work quantifies, I believe for the first time, the value of personal connections to elected officials for lobbyists in Washington, rather than relying on anecdotal evidence,” Draca says.

The researchers used two public directories of government staffers, government salaries, lobbyists, and lobbyists’ revenues. The study was only possible because of progressive US laws to constrain activity of lobbyists and increase transparency about the way they operate, Draca says.

By comparison, the UK still does not have compulsory disclosure of lobbying activity and proposed reforms are much weaker than in the US.

“It seems in the UK lobbying is only considered when a possible scandal pushes the topic into the limelight,” Draca says.

“Last year UK Defense Secretary Liam Fox resigned in the wake of controversy over the dealings of his friend Adam Werritty. These financial relationships need to be a matter of public record here in the UK, as they are now in the US, rather than leaving them in the back wings of the political theater.”

The paper was co-authored by Jordi Blanes i Vidal, London School of Economics, and Christian Fons-Rosen from Universitat Pompeu Fabra.

Source: University of Warwick

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