Associate Professor Sepehr Shahshahani and Princeton’s Professor Nolan McCarty share their research and finding on the relationship between market power and political power in a ProMarket article.
We find no positive correlation between an industry’s economic concentration and its concentration of lobbying expenditures—meaning economically concentrated industries are not necessarily politically concentrated in terms of lobbying. This casts doubt on the premise that economic concentration breeds concentration of political influence. We also find no correlation between an industry’s economic concentration and the share of industry revenue dedicated to lobbying (a result that is forthcoming in a new version of the paper). This goes against the idea, advanced by legal scholar Tim Wu and other Neo-Brandeisians, that concentration makes it easier for firms to coordinate and devote greater sums to influence-buying activities.
