Lobbyists as Gatekeepers: Theory and Evidence

Abstract

Lobbyists are omnipresent in the policy-making process, but the value that they bring to both clients and politicians remains poorly understood. We develop a model in which a lobbyist’s value derives from his ability to selectively screen which clients he brings to a politician, thereby earning the politician’s trust and preferential treatment for his clients. Lobbyists face a dilemma, as their ability to screen also increases their value to special interests and the prices they can charge. A lobbyist’s profit motive undermines his ability to solve this dilemma, but an interest in policy outcomes—due to either a political ideology or a personal connection—enhances it, which paradoxically increases his profits. Using a unique data set from reports mandated by the Foreign Agents Registration Act, we find that lobbyists become more selective when they are more ideologically aligned with politicians, consistent with our prediction.

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