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

  • ANSOLABEHERE, STEPHEN
  • DE FIGUEIREDO, JOHN M.
  • SNYDER, JAMES M.

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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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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  12. 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 and Economics, University of Chicago Press, vol. 40(2), pages 317-50, October.
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