Academic Earmarks and the Returns to Lobbying

38 Pages Posted: 6 May 2002

See all articles by John M. de Figueiredo

John M. de Figueiredo

Duke University School of Law; Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative

Brian S. Silverman

University of Toronto - Rotman School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: May 2002

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, University Lobbying, Federal Funding of University Research

JEL Classification: K0, H1

Suggested Citation

de Figueiredo, John M. and Silverman, Brian S., Academic Earmarks and the Returns to Lobbying (May 2002). Harvard Law and Economics Discussion Paper No. 370; MIT Sloan Working Paper No. 4245-02. Available at SSRN: https://ssrn.com/abstract=310901 or http://dx.doi.org/10.2139/ssrn.310901

John M. De Figueiredo (Contact Author)

Duke University School of Law ( email )

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Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
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National Bureau of Economic Research (NBER)

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Duke Innovation & Entrepreneurship Initiative

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Durham, NC 27701
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Brian S. Silverman

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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