Academic Earmarks and the Returns to Lobbying

John M. De Figueiredo and Brian Silverman

No 4245-02, Working papers from Massachusetts Institute of Technology (MIT), Sloan School of Management

Abstract: Despite a large literature on lobbying and information transmission by interest groups, no prior study has measured returns to lobbying. In this paper, we statistically estimate the returns to lobbying by universities for educational earmarks (which now represent 10 percent of federal funding of university research). The returns to lobbying approximate zero for universities not represented by a member of the Senate Appropriations Committee (SAC) or House Appropriations Committee (HAC). However, the average lobbying university with representation on the SAC receives an average return to one dollar of lobbying of $11-$17; lobbying universities with representation on the HAC obtain $20-$36 for each dollar spent. Moreover, we cannot reject the hypothesis that lobbying universities with SAC or HAC representation set the marginal benefit of lobbying equal to its marginal cost, although the large majority of universities with representation on the HAC and SAC do not lobby, and thus do not take advantage of their representation in Congress. On average, 45 percent of universities are predicted to choose the optimal level of lobbying. In addition to addressing questions about the federal funding of university research, we also discuss the impact of our results for the structure of government.

Keywords: Returns to Lobbying; Federal Funding of University; University Lobbying (search for similar items in EconPapers)
Date: 2002-06-05
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Citations: View citations in EconPapers (5)

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Working Paper: Academic Earmarks and the Returns to Lobbying (2002)
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