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Corporate Campaign Contributions, Repeat Giving, and the Rewards to Legislator Reputation

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  • Kroszner, Randall S
  • Stratmann, Thomas

Abstract

Are politicians who follow a strategy of reputational development rewarded with high levels of corporate campaign contributions? Reputational clarity could help to reduce uncertainty about a candidate and lead to greater campaign contributions from favored interests. Alternatively, such clarity could alienate those who disagree and prevent the politician from obtaining contributions from groups on both sides of an issue. We outline an approach that considers conditions under which a politician would or would not prefer reputational development and policy-stance clarity and consistency in the context of repeat dealing with special interests. Our proxy for reputational development is the percentage of repeat givers to a legislator. Using data on corporate political action committee (PAC) contributions to members of the U.S. House during the seven electoral cycles from 1983/84 to 1995/96, we explore a variety of alternative hypotheses and find that greater reputational development is rewarded with greater PAC contributions.

Suggested Citation

  • Kroszner, Randall S & Stratmann, Thomas, 2005. "Corporate Campaign Contributions, Repeat Giving, and the Rewards to Legislator Reputation," Journal of Law and Economics, University of Chicago Press, vol. 48(1), pages 41-71, April.
  • Handle: RePEc:ucp:jlawec:y:2005:v:48:i:1:p:41-71
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    File URL: http://dx.doi.org/10.1086/429114
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    References listed on IDEAS

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    Cited by:

    1. Dewan, Torun & Myatt, David P., 2008. "The Qualities of Leadership: Direction, Communication, and Obfuscation," American Political Science Review, Cambridge University Press, vol. 102(03), pages 351-368, August.
    2. Corinna Ahlfeld, 2010. "Reputation Sells -Compensation Payments in the Political Sphere," Departmental Discussion Papers 145, University of Goettingen, Department of Economics.
    3. Aisbett, Emma & McAusland, Carol, 2013. "Firm characteristics and influence on government rule-making: Theory and evidence," European Journal of Political Economy, Elsevier, vol. 29(C), pages 214-235.
    4. repec:bla:kyklos:v:70:y:2017:i:2:p:220-255 is not listed on IDEAS
    5. Randall Bennett & Christine Loucks, 2008. "PAC Contributions from Sectors of the Financial Services Industry, 1998–2002," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(4), pages 407-419, December.
    6. Alberto Chong & Mark Gradstein, 2007. "On the Determinants and Effects of Political Influence," Research Department Publications 4540, Inter-American Development Bank, Research Department.
    7. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July.
    8. repec:bla:stratm:v:38:y:2017:i:12:p:2424-2443 is not listed on IDEAS
    9. repec:eee:forpol:v:85:y:2017:i:p1:p:85-94 is not listed on IDEAS
    10. Gabriel, Stuart A. & Kahn, Matthew E. & Vaughn, Ryan K., 2015. "Congressional influence as a determinant of subprime lending," Journal of Housing Economics, Elsevier, vol. 28(C), pages 91-102.
    11. Ramanna, Karthik, 2008. "The implications of unverifiable fair-value accounting: Evidence from the political economy of goodwill accounting," Journal of Accounting and Economics, Elsevier, vol. 45(2-3), pages 253-281, August.
    12. Lin, Chih-Yung & Ho, Po-Hsin & Shen, Chung-Hua & Wang, Yu-Chun, 2016. "Political connection, government policy, and investor trading: Evidence from an emerging market," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 153-166.
    13. Alberto Chong & Mark Gradstein, 2007. "Sobre los determinantes y efectos de la influencia de politica (On the Determinants and Effects of Political Influence)," Research Department Publications 4541, Inter-American Development Bank, Research Department.
    14. G. Bellettini & P. Roberti, 2016. "Politicians' coherence and government debt," Working Papers wp1087, Dipartimento Scienze Economiche, Universita' di Bologna.
    15. Ovtchinnikov, Alexei V. & Pantaleoni, Eva, 2012. "Individual political contributions and firm performance," Journal of Financial Economics, Elsevier, vol. 105(2), pages 367-392.
    16. Ivan Pastine & Tuvana Pastine, 2010. "Politician preferences, law-abiding lobbyists and caps on political contributions," Public Choice, Springer, vol. 145(1), pages 81-101, October.

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