Lobbying for Government Appropriations
74 Pages Posted: 21 Jul 2018 Last revised: 30 Aug 2023
Date Written: June 16, 2022
Abstract
This article investigates the effect of lobbying on government contract allocation. I consider how lobbying affects both total contract spending and the distribution of contracts between firms. I solve a novel contest model which incorporates these two effects, and then I structurally estimate it using a panel of federal contractors. The results suggest that lobbying increases contract spending by $8.837 billion (3.22%) per year. However, its effects on the observed contract distribution and firm revenues are relatively small. Lastly, I find that increasing competition in procurement generally results in less lobbying.
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