This chapter investigates how politically connected firms affect job creation in Lebanon. Using firm-level census data, the chapter first establishes that politically connected firms create more jobs than otherwise similar unconnected firms. This overstaffing increased around the 2009 parliamentary elections. These findings suggest that firms and politicians exchange favors, whereby firms receive various regulatory privileges, and pay-back politicians (in part) by employing some of their supporters. Second, the chapter evaluates the economic costs of cronyism, showing how sectors with more connected firms create fewer jobs compared to otherwise similar sectors with no cronyism. Using several pieces of evidence, the authors argue that this occurs because unconnected firms reduce their own job creation sharply in the face of unfair competition from connected firms. The chapter also describes how these effects were larger during the 2009 election year.