The Duck of Minerva

The Duck Quacks at Twilight

Revolving Doors, Lobbyist Edition

September 24, 2010

Via Marginal Revolution, an interesting new paper that explores what happens to an ex-staffer’s lobbying revenue when the politician they worked for leaves office.

Our main finding is that lobbyists connected to US Senators suff er an average 24% drop in generated revenue when their previous employer leaves the Senate. The decrease in revenue is out of line with pre-existing trends, it is discontinuous around the period in which the connected Senator exits Congress and it persists in the long-term. The sharp decrease in revenue is also present when we study separately a small subsample of unexpected and idiosyncratic Senator exits. Measured in terms of median revenues per ex-staffer turned lobbyist, this estimate indicates that the exit of a Senator leads to approximately a $177,000 per year fall in revenues for each affiliated lobbyist. The equivalent estimated drop for lobbyists connected to US Representatives leaving Congress is a weakly statistically signi cant 10% of generated revenue.  The equivalent estimated drop forlobbyists connected to US Representatives leaving Congress is a weakly statistically signi cant 10% ofgenerated revenue.We also find evidence that ex-sta ffers are more likely to leave the lobbying industry after their connected Senator or Representative exits Congress. (emphasis mine)

They also show that ex-staffers revenues has grown at a faster rate than non ex-staffers since the late 1990’s.

Here’s a graphical representation of the findings from the paper:

[Cross-posted at Signal/Noise]

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Petti is Associate Director of Insights and Analytics at Alexion . Previously, he served as Lead Data Scientist in the Decision Sciences group at Maritz Motivation and a Global Data Strategist and Subject Matter Expert for Gallup.