The Partisan Ties of Lobbying Firms Alexander C. Furnas University of Michigan
[email protected] Michael T. Heaney University of Michigan
[email protected] Timothy M. LaPira James Madison University
[email protected] Paper presented at the 113th Annual Meeting of the American Political Science Association, San Francisco, California, August 31-September 3, 2017. Abstract Organized interests commonly face principal-agent problems in attempting to control the lobbyists under their employ. This article explains how lobbying firms help to curtail these problems by reducing the degree of asymmetric information between lobbyists and their clients. It shows that lobbying firms’ partisan identities provide informative signals about lobbyists’ loyalties. Using data from lobbying records released under the Lobbying Disclosure Act, as well as original data collected on lobbying firms, this article examines the effects of partisan ties on firms’ lobbying revenues. The results demonstrate that partisan ties with the majority party of the House of Representatives translate into higher lobbying revenues, but ties with the Senate’s majority party make no significant difference for revenue. These findings provide evidence of the political market value of partisan ties, as well as evidence of perceived differences in the institutional vulnerability of the House and Senate to interest group pressure. Keywords Lobbying firm, Congress, partisanship, credence good, principal-agent problem Acknowledgements For helpful suggestion, the authors are grateful to Scott Ainsworth, Marie Hojnacki, Tom Holyoke, Beth Leech, and Rick Price. For research assistance, the authors thank Amy Cesal, Amelia Chan, Dulce Guerrero, Connor Herrington, Brittany Honos, Ji Soo Kang, Imran Mohamedesha, Nurlan Orujlu, Nabah Rizvi, and Heather Smith.