Testing Political Antitrust

96 Pages Posted: 27 Feb 2023 Last revised: 1 Nov 2023

See all articles by Sepehr Shahshahani

Sepehr Shahshahani

Fordham University School of Law

Nolan McCarty

Princeton University - Princeton School of Public and International Affairs; Princeton University - Department of Political Science

Date Written: February 18, 2023

Abstract

Observers fear that large corporations have amassed too much political power. The central fact that animates this concern is growing economic concentration—the rise in the market share of a small number of top firms. These firms are thought to use their enhanced economic power to capture the government and undermine democracy by lobbying. Many scholars and activists have urged the use of antitrust law to combat this threat, leading a “political antitrust” movement that advocates explicit incorporation of political considerations into antitrust enforcement. Political antitrust has sparked great debate not only in academic circles but also among policymakers.

But the debate has been largely data-free; there is little systematic evidence on whether increased economic concentration leads to democratic harms in established democracies. In this Article, we fill that gap, bringing systematic data analysis to bear on the issue for the first time. We make three contributions. First, we create a comprehensive dataset on lobbying of the U.S. federal government, capturing nearly one million records over the past two decades. Second, we use our dataset to map lobbying patterns, focusing on the connection between economics and politics. Third, we empirically test some postulates of political antitrust.

Our findings do not support the political antitrust movement’s central hypothesis that there is an association between economic concentration and the concentration of lobbying power. We do not find a strong relationship between economic concentration and the concentration of lobbying expenditure at the industry level. Nor do we find a significant difference between top firms’ and other firms’ allocation of additional revenues to lobbying. And we find no evidence that increasing economic concentration has appreciably restricted the ability of smaller players to seek political influence through lobbying. Ultimately, our findings show that the political antitrust movement’s claims do not rest on a solid empirical foundation in the lobbying context. Our findings do not allay all concerns about transformation of economic power into political power, but they show that such transformation is not straightforward, and they counsel caution about reshaping antitrust law in the name of protecting democracy.

Keywords: antitrust, political antitrust, neo-Brandeisian movement, lobbying, economic concentration

JEL Classification: D72, K21, L40

Suggested Citation

Shahshahani, Sepehr and McCarty, Nolan, Testing Political Antitrust (February 18, 2023). 98 New York University Law Review 1169 (2023), Fordham Law Legal Studies Research Paper No. 4363447, Available at SSRN: https://ssrn.com/abstract=4363447

Sepehr Shahshahani (Contact Author)

Fordham University School of Law ( email )

140 West 62nd Street
New York, NY 10023
United States

Nolan McCarty

Princeton University - Princeton School of Public and International Affairs ( email )

Princeton University
Princeton, NJ 08544-1021
United States

Princeton University - Department of Political Science ( email )

Corwin Hall
Princeton, NJ 08544-1013
United States
(609) 258-1862 (Phone)
(609) 258-2809 (Fax)

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