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Why Is There So Little Money in Politics?

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Author Info
Stephen Ansolabehere
John M. de Figueiredo
James M. Snyder
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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9409.

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Date of creation: Jan 2003
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Handle: RePEc:nbr:nberwo:9409

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H4 - Public Economics - - Publicly Provided Goods
K0 - Law and Economics - - General

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  1. 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)
  2. 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.
  3. 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.
  4. 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)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Matthias Dahm & Nicolás Porteiro, 2006. "Side Effects of Campaign Finance Reform," Working Papers 06.15, Universidad Pablo de Olavide, Department of Economics. [Downloadable!]
    Other versions:
  2. John M. de Figueiredo & Charles M. Cameron, 2006. "Endogenous Cost Lobbying: Theory and Evidence," Hi-Stat Discussion Paper Series d05-156, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
  3. Andrea Prat & Riccardo Puglisi & James Snyder, 2005. "Is Private Campaign Finance a Good Thing? Estimates of the Potential Informational Benefits," Levine's Working Paper Archive 122247000000000960, David K. Levine. [Downloadable!]
  4. Seema Jayachandran, 2004. "The Jeffords Effect," UCLA Economics Online Papers 297, UCLA Department of Economics. [Downloadable!]
    Other versions:
  5. Martial Foucault, 2008. "L'argent fait-il le bonheur électoral ?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00339814_v1, HAL. [Downloadable!]
  6. Elena Panova, 2007. "Congruence Among Voters and Contributions to Political Campaigns," Cahiers de recherche 0722, CIRPEE. [Downloadable!]
  7. John M. de Figueriedo, 2004. "The Timing, Intensity, and Composition of Interest Group Lobbying: An Analysis of Structural Policy Windows in the States," NBER Working Papers 10588, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Matias J Iaryczower, 2005. "Essays in Political Influence," Levine's Working Paper Archive 618897000000000945, David K. Levine. [Downloadable!]
  9. Pablo T. Spiller & Sanny Liao, 2006. "Buy, Lobby or Sue: Interest Groups' Participation in Policy Making - A Selective Survey," NBER Working Papers 12209, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Matias Iaryczower & Pablo Spiller & Mariano Tommasi, 2005. "Judicial Lobbying: The Politics of Labor Law Constitutional Interpretation," NBER Working Papers 11317, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Allan Drazen & Nuno Limão & Thomas Stratman, 2004. "Political Contribution Caps and Lobby Formation: Theory and Evidence," NBER Working Papers 10928, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
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