Question

How can there be an estimate of the rate-of-return of lobbying efforts influence the US political and economic systems?

Answer 1

The Lobbying industry in the present scenario has witnessed exponential growth . The growth of general public, media ,special interest groups has paved the way for powerful mechanisms affecting public policy and political and economic systems. Most of the Scholars face the problem of estimation of rate of returns of lobbying due to the lack of information on expenditure. In the public sector the common assumption is that lobbying expenditure provides a high rate of returns to contributors. Lobbying activity is highly associated with amount for firm industry size profitability liquidity and growth prospects which in turn have its effect on the political and economic system to formulate various reforms. Lobbying has reduced the effective tax rate and corporate campaigns have contributed to lower state corporate taxes .These lobbying system have given campaigns higher contributions, even after controlling various impacts.

Estimate of rate of return on lobbying in the US economy can be formulated for the better and the stipulated political and economic system. When the US government makes an investment in various sectors specially the revenue generating system, the outcome will fetch revenue and it indirectly contribute for political and economic change and we could see that revenue is generated and that revenue can be used once again for investment which in turn and hence the development as well as growth of an economy takes place.

For example, if investment is made in the education sector when student avail the service as in return it contributes for economic change because students graduated from college or university will in turn be employed and they contribute for economic change. Therefore lobbying in Economics plays a crucial role as it contributes to economic and political structure changes of an economy.