New Study: Lobbying Doesn’t Help Company Profits—But It’s Great For Executive Pay

TATSIANAMA/Shutterstock

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.

Who really profits when companies drop millions on lobbying? A new paper by Russell Sobel and Rachel Graefe-Anderson of the Mercatus Center at George Mason University suggests a surprising answer: Corporate America’s record expenditures on political influence may be doing little for the companies doing the spending, but a lot for their executives’ pocketbook.

“Our main finding suggests that the top executives of firms are the ones who are able to capture the benefits of firm political connections,” the paper says. The researchers mined a trove of PAC contributions and lobbying data from the Center for Responsive Politics and matched it with a variety of standard corporate performance indicators. They found that no matter how much lobbying or political contributions a company pays for, there’s almost no significant rise in the company’s overall performance—but executive compensation does rise significantly. The only exceptions were the banking and finance industries, where companies also appear to gain some benefits.

Regardless of who benefits, influence spending still registers in the billions of dollars: As the chart below shows, the amount of money spent on lobbying annually more than doubled to $3.3 billion between 1998 and 2013. In 2012 alone, the two leading spenders, the pharmaceuticals and insurance sectors, dropped more than $409 million on lobbying and more than $107 million on political contributions.

 

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate