> A smaller role for government, in particular a reduction in policies that try to pick winners and losers explicitly (e.g. taxes or fees that favor particular companies or industries), could reduce the incentive to influence the creation of "targeted" legislation.

Exactly. Companies look at the dollars they spend and ask themselves, how can I get the best return on spending this dollar? As government regulations increasingly influence their bottom line, companies will increasingly conclude that spending money influencing regulations is a good use of their money. Hence, more lobbying.