Corporate influence, conservative “model bills,” and state economic outcomes

Abstract

Researchers have found positive relationships between economic freedom and economic growth and negative relationships between lobbying and growth. We test the impact of policies induced by lobbying for free markets, using state‐level data to evaluate the effects of high enactment rates for bills advocated by a prominent free‐market lobbyist, the American Legislative Exchange Council (ALEC). Our approach accounts for the probability ALEC targets states. We find that, holding constant existing economic freedom, there is no effect on output, possibly negative effects on employment, and wage increases. States raise more revenue and increase expenditures. Poverty and inequality rise.