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Are Campaign Contributions Investment in the Political Marketplace or Individual Consumption? Or "Why Is There So Little Money in Politics?"

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Author Info
ANSOLABEHERE, STEPHEN
DE FIGUEIREDO, JOHN M.
SNYDER, JAMES M.
Abstract

In this paper, we argue that campaign contributions are not a form of policy-buying, but are rather a form of political participation and consumption. We summarize the data on campaign spending, and show through our descriptive statistics and our econometric analysis that individuals, not special interests, are the main source of campaign contributions. Moreover, we demonstrate that campaign giving is a normal good, dependent upon income, and campaign contributions as a percent of GDP have not risen appreciably in over 100 years - if anything, they have probably fallen. We then show that only one in four studies from the previous literature support the popular notion that contributions buy legislators' votes. Finally, we illustrate that when one controls for unobserved constituent and legislator effects, there is little relationship between money and legislator votes. Thus, the question is not why there is so little money politics, but rather why organized interests give at all. We conclude by offering potential answers to this question

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File URL: http://hdl.handle.net/1721.1/3511
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Publisher Info
Paper provided by Massachusetts Institute of Technology (MIT), Sloan School of Management in its series Working papers with number 4272-02.

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Date of creation: 09 May 2003
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Handle: RePEc:mit:sloanp:3511

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Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA

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Keywords: Campaign Finance; Campaign Contributions; Corporate Political Activity; Political Economy;

References listed on IDEAS
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  1. Vesenka, Mary H., 1989. "Economic interests and ideological conviction : A note on PACs and agricultural acts," Journal of Economic Behavior & Organization, Elsevier, vol. 12(2), pages 259-263, October. [Downloadable!] (restricted)
  2. Kroszner, Randall S & Stratmann, Thomas, 1998. "Interest-Group Competition and the Organization of Congress: Theory and Evidence from Financial Services' Political Action Committees," American Economic Review, American Economic Association, vol. 88(5), pages 1163-87, December. [Downloadable!] (restricted)
    Other versions:
  3. Levitt, Steven D, 1996. "How Do Senators Vote? Disentangling the Role of Voter Preferences, Party Affiliation, and Senate Ideology," American Economic Review, American Economic Association, vol. 86(3), pages 425-41, June. [Downloadable!] (restricted)
  4. Baron, David P, 1989. "Service-Induced Campaign Contributions and the Electoral Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 104(1), pages 45-72, February. [Downloadable!] (restricted)
  5. Gregory M. Saltzman, 1987. "Congressional voting on labor issues: The role of PACs," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 40(2), pages 163-179, January.
  6. Marx, Leslie M & Matthews, Steven A, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Blackwell Publishing, vol. 67(2), pages 327-58, April.
    Other versions:
  7. Bronars, Stephen G & Lott, John R, Jr, 1997. "Do Campaign Donations Alter How a Politician Votes? Or, Do Donors Support Candidates Who Value the Same Things That They Do?," Journal of Law & Economics, University of Chicago Press, vol. 40(2), pages 317-50, October.
  8. Kau, James B & Keenan, Donald & Rubin, Paul H, 1982. "A General Equilibrium Model of Congressional Voting," The Quarterly Journal of Economics, MIT Press, vol. 97(2), pages 271-93, May. [Downloadable!] (restricted)
  9. repec:bep:buspol:2:2000:1:35-52 is not listed on IDEAS
  10. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September. [Downloadable!] (restricted)
    Other versions:
  11. Langbein, Laura I, 1993. " PACs, Lobbies and Political Conflict: The Case of Gun Control," Public Choice, Springer, vol. 77(3), pages 551-72, November.
  12. repec:bep:eapadv:v:1:y:2001:i:advances/1/1:p:1008-1008 is not listed on IDEAS
    Other versions:
  13. Coughlin, Cletus C, 1985. "Domestic Content Legislation: House Voting and the Economic Theory of Regulation," Economic Inquiry, Oxford University Press, vol. 23(3), pages 437-48, July.
  14. Peltzman, Sam, 1984. "Constituent Interest and Congressional Voting," Journal of Law & Economics, University of Chicago Press, vol. 27(1), pages 181-210, April.
  15. Lott, John R, Jr, 2000. "A Simple Explanation for Why Campaign Expenditures Are Increasing: The Government Is Getting Bigger," Journal of Law & Economics, University of Chicago Press, vol. 43(2), pages 359-93, October.
  16. Snyder, James M, Jr, 1992. "Long-Term Investing in Politicians; or, Give Early, Give Often," Journal of Law & Economics, University of Chicago Press, vol. 35(1), pages 15-43, April.
  17. Silberman, Jonathan I & Durden, Garey C, 1976. "Determining Legislative Preferences on the Minimum Wage: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 84(2), pages 317-29, April. [Downloadable!] (restricted)
  18. Levitt, Steven D, 1994. "Using Repeat Challengers to Estimate the Effect of Campaign Spending on Election Outcomes in the U.S. House," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 777-98, August. [Downloadable!] (restricted)
  19. Grier, Kevin B & Munger, Michael C, 1991. "Committee Assignments, Constituent Preferences, and Campaign Contributions," Economic Inquiry, Oxford University Press, vol. 29(1), pages 24-43, January.
  20. Chappell, Henry W, Jr, 1982. "Campaign Contributions and Congressional Voting: A Simultaneous Probit-Tobit Model," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 77-83, February. [Downloadable!] (restricted)
  21. Poole, Keith T & Romer, Thomas & Rosenthal, Howard, 1987. "The Revealed Preferences of Political Action Committees," American Economic Review, American Economic Association, vol. 77(2), pages 298-302, May.
  22. Stratmann, Thomas, 1995. "Campaign Contributions and Congressional Voting: Does the Timing of Contributions Matter?," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 127-36, February. [Downloadable!] (restricted)
  23. repec:bep:buspol:2:2000:1:75-88 is not listed on IDEAS
    Other versions:
  24. Stratmann, Thomas, 2002. "Can Special Interests Buy Congressional Votes? Evidence from Financial Services Legislation," Journal of Law & Economics, University of Chicago Press, vol. 45(2), pages 345-73, October.
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