Unobserved Contributions and Political Influence: Evidence from the Death of Top Donors

It has long been noted that there is little money in U.S. politics relative to the stakes. But what if political contributions are not fully observable or are non-monetary and thus difficult to quantify? We study this question using new data on top donors in U.S. congressional races. To identify their influence, we exploit exogenous shocks to candidate–donor relationships generated by donor deaths. We show that the death of a top donor reduces a candidate's probability of election in subsequent elections. The loss of a donor also affects legislative behavior: elected candidates become more aligned with their party and concentrate their legislative activity in fewer policy areas. These effects are not explained by the size of donors' direct contributions. Instead, they are stronger for prominent donors and appear to operate through their impact on broader fundraising and social networks. Our findings suggest that observable campaign donations capture only a small share of the political influence exercised by major donors.