Washington is teeming with lobbyists. In 2009, there were 13,700 of them. So you’d think it would be easy for any company to stride into town and start pressing its issues on members of Congress. But that doesn’t seem to be the case. Only a relatively small number of firms lobby each year. What’s more, the turnover is quite low. Lobbying, it seems, is not a game that just anyone can play.
That’s according to a new working paper from William R. Kerr, William F. Lincoln and Prachi Mishra of the National Bureau of Economic Research, who scoured the lobbying records of publicly traded companies from 1998 to 2006. They found that fewer than 300 firms in the sample actively lobbied Congress in any given year, and it was mainly large, rich firms getting in on the fun. Lobbying status is also persistent over time: “The probability that a firm lobbies in the current year given that it lobbied in the previous year is 92%,” the report said. Influence-peddling tends to be dominated by the same tiny handful of companies year after year:
The authors found real barriers to entry for firms and groups who want to lobby. It takes time and effort to learn the relevant laws, to hire lobbyists (whether in-house or outside), develop an agenda, figure out who your allies and opponents in Washington are and establish relationships. “To the extent that lobbying represents a legislative subsidy to sympathetic policy makers,” the economists wrote, “politicians may also require such an initial investment of resources to signal a firm’s willingness to support them over time.”
That also means that the companies most affected by a given legislative issue won’t necessarily be the ones talking directly to Congress about it. For example, the authors looked at what happened when the law governing H-1B visas for high-skilled immigrants was set to expire in 2004. Capitol Hill didn’t see an influx of new companies dependent on high-skilled foreign labor arrive and start complaining. What mostly happened was that a few of the existing firms already lobbying on other issues (say, Microsoft and General Electric) shifted their focus and resources toward immigration.
Now, obviously there are still trade associations and nonprofits and other advocacy groups who push their issues on Capitol Hill as well. But it’s fairly difficult for an individual company to start lobbying directly unless it’s been roaming the halls of Congress for years and years.