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Tyler Cowen

Lobbying Doesn't Help Companies or Their Shareholders

There's a cost when businesses focus more on Washington than on innovation.
Lots of handshakes, little action.

Lots of handshakes, little action.

Photographer: David Scull/Bloomberg

Does business really get its way in Washington? And does business lobbying cement the control of the wealthiest 1 percent over the U.S. economy? Many people think so, but a recent comprehensive study throws cold water on those notions.

The numbers instead indicate that lobbying hurts the underlying capital values of the corporations. Lobbying doesn’t increase the chance that favored bills are passed by Congress, and it isn’t associated with the company receiving more government contracts.