Conclusion and summary
We have constructed two models of how economic interest groups allocate their campaign monies between candidates for the same legislative house. The models make contrasting assumptions regarding an interest group's strategy for affecting policy outcomes. One model assumes contributions are given to affect election probabilities while the other assumes that contributions are exchanged for political favors. The validity of these assumptions can best be examined by testing the predictions of the two models.
The contribution functions of seven economic interest groups to 1974 candidates for the U.S. House were estimated with Tobit analysis. A beta functional form was used, with expected vote percentage and voting score as independent variables. For all seven groups, the mode of this function was significantly different from fifty percent of the expected vote, supporting the prediction that economic contributors prefer likely winners. This result tends to support the assumption that an economic interest group contributes in order to obtain political favors, not to affect electoral outcomes. Although we cannot exclude the possibility that some mixed strategy is followed, the strategy described by the exchange model appears to have dominated economic interest group giving in the 1974 U.S. House races.
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This article is a revision of part of the author's doctoral dissertation at the University of Colorado. He wishes to thank his wife, Robert McNown, Gordon Tullock, Robert Wichers, and especially Jack Ochs for helpful comments on earlier drafts and the Social Science Computer Research Institution, K.Y. Chang, and the Brookings Institution for computational assistance. The usual caveat applies.
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Welch, W.P. The allocation of political monies: Economic interest groups. Public Choice 35, 97–120 (1980). https://doi.org/10.1007/BF00154752
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DOI: https://doi.org/10.1007/BF00154752