Foreign Influence in U.S. Politics

By: Marco Grotteria, Max Miller and S. Lakshmi Naaraayanan

Format:Print
| Language:English
| Pages:56

Abstract

This paper investigates the informational role of lobbyists in the context of foreign lobbying in the United States. Using Department of Justice data on contacts between foreign governments and US legislators, we show that exogenous shocks to these connections influence foreign aid, tariff legislation, and corporate subsidies to foreign firms. Subsidies to connected foreign firms are associated with lower local employment, challenging the view that lobbyists provide technical expertise for better policymaking. However, subsidies to connected firms increase incumbent legislators’ vote shares suggesting that foreign lobbying may still deliver valuable political information. Overall, our findings highlight the nature of the information channel of lobbying and underscore the broad economic significance of foreign lobbying in the US.