The Returns from Rent-Seeking: Campaign Contributions, Firm Subsidies, and the Byrd Amendment
AbstractThis paper examines Congressional support of the Byrd Amendment, a new antidumping law that directs the U.S. Customs Service to distribute collected duties to protected firms. A critical feature of the Byrd Amendment is that it produces a highly transparent measure of how much each firm is rewarded for its rent-seeking efforts to secure the bill’s passage, specifically the dollar value its Byrd disbursement. Therefore, this policy provides researchers with a unique setting in which to study the link between campaign contributions, Congressional behavior, and the subsequent financial returns to firms. Our empirical results show that campaign contributions from potential beneficiaries increased the likelihood that lawmakers would sponsor the Byrd Amendment. We also show that political contributions from the law’s beneficiaries increased with the rewards that they expected to receive, although not by as much as predicted by some political economy models of trade policy.
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Bibliographic InfoPaper provided by EconWPA in its series International Trade with number 0408003.
Length: 17 pages
Date of creation: 16 Aug 2004
Date of revision:
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Byrd Amendment; Antidumping; Campaign Contributions; Political Economy of Trade Policy;
Other versions of this item:
- Benjamin H. Liebman & Kara M. Reynolds, 2006. "The returns from rent-seeking: campaign contributions, firm subsidies and the Byrd Amendment," Canadian Journal of Economics, Canadian Economics Association, vol. 39(4), pages 1345-1369, November.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-23 (All new papers)
- NEP-COM-2004-08-23 (Industrial Competition)
- NEP-POL-2004-08-23 (Positive Political Economics)
- NEP-REG-2004-08-23 (Regulation)
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