Interesting point. In theory, when an industry has many companies there’s an incentive to free ride on the lobbying efforts of others and overall there’s less lobbying. Whereas if an industry has only one company it captures all the benefits of lobbying, so does more of it.
I don’t know much about US auto dealers, but this paper seems to find that even within that industry, consolidation leads to increased lobbying (if it’s within the same state). But what your example may point to is that industry concentration is not the only variable that influences lobbying power (and therefore the returns to effort). It may be that auto dealer lobbying has a free-riding problem, but because they are well placed otherwise to lobby have more incentive to solve the free-rider problem (I’d guess history and the culture of the industry matter a lot).
The animal agriculture industry may have more lobbying advantages than auto dealers – there are many farmers but they are geographically dispersed (and often located in geographies overrepresented in political systems) and there are few ‘integrators’ (these are the chicken companies etc.) so they can better coordinate lobbying efforts. The economic interests of farmers and ‘integrators’ aren’t perfectly aligned, but perhaps the ‘integrators’ partially solve the free-rider problem of having many farmers.
[cross-posting my response from Substack :)]
Interesting point. In theory, when an industry has many companies there’s an incentive to free ride on the lobbying efforts of others and overall there’s less lobbying. Whereas if an industry has only one company it captures all the benefits of lobbying, so does more of it.
I don’t know much about US auto dealers, but this paper seems to find that even within that industry, consolidation leads to increased lobbying (if it’s within the same state). But what your example may point to is that industry concentration is not the only variable that influences lobbying power (and therefore the returns to effort). It may be that auto dealer lobbying has a free-riding problem, but because they are well placed otherwise to lobby have more incentive to solve the free-rider problem (I’d guess history and the culture of the industry matter a lot).
The animal agriculture industry may have more lobbying advantages than auto dealers – there are many farmers but they are geographically dispersed (and often located in geographies overrepresented in political systems) and there are few ‘integrators’ (these are the chicken companies etc.) so they can better coordinate lobbying efforts. The economic interests of farmers and ‘integrators’ aren’t perfectly aligned, but perhaps the ‘integrators’ partially solve the free-rider problem of having many farmers.