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Politician’s ideology and campaign contributions from interest groups

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Abstract

This paper studies the effect of a politician’s ideological strength on campaign contributions that the politician receives from interest groups. If interest groups care mainly about current, or short-run, policy outcomes, they will make campaign contributions to ideologically neutral politicians who are often pivotal voters in the legislature. However, if interest groups care more about future, or long-run, policy outcomes, they have an incentive to help ideologically strong politicians who share similar policy preferences to win the election. Thus, liberal (conservative) interest groups will make campaign contributions to liberal (conservative, respectively) politicians. Using data on the amount of campaign contributions given by interest groups to the members of the US House of the Representatives in the 111th Congress (2009–2010), I show that ideologically neutral politicians receive more campaign contributions from interest groups. This result suggests that interest groups are primarily motivated by the short-run incentive.

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Notes

  1. Some of the material in this section, especially the related literature on interest groups, is also used in Choi (2014).

  2. http://www.opensecrets.org.

  3. An online appendix to this paper provides a simple theoretical model to illustrate these points.

  4. As I explain in the data section, I use contributions from PACs given to politicians for my analysis.

  5. Moon (2004), for example, studies the relationship between campaign resources and candidate position taking. He uses a candidate’s electoral prospect and state population as two instrumental variables that are expected to affect campaign spending, but not candidate policy positions. In a related paper, Ensley (2009) uses the South dummy as an instrument for ideology.

  6. See, for example, Stigler (1971), Kalt and Zupan (1984), and Peltzman (1985).

  7. See, for example, Kau and Rubin (1979; 1993), Bernstein (1989), Poole and Rosenthal (1996), and Lee et al. (2004)

  8. For a survey, see Persson and Tabellini (2000) and Grossman and Helpman (2001).

  9. See, for example, Goldberg and Maggi (1999), Gawande and Bandyopadhyay (2000), Gawande et al. (2006), Ludema et al. (2010), Facchini et al. (2011).

  10. See, for example, Figueiredo and Silverman (2006) for universities’ earmarked grants, Richter et al. (2009) for a corporate tax rate, Gawande et al. (2009) for tourism, and Chen et al. (2012) for corporations’ financial outcomes.

  11. See, for example, Mian et al. (2010a, (2010b), Igan et al. (2012) and Choi (2014).

  12. Some of the material in this subsection is also used in Choi (2014).

  13. Corporates and labor unions, for example, cannot directly give money to candidates. They set up a PAC and raise money and donate to a politician through the PAC. The list of top PACs include AT&T Inc., Lockheed Martin, National Association of Realtors, American Bankers Association, Comcast Corp., Boeing Co., and Berkshire Hathaway. See https://www.opensecrets.org/pacs/.

  14. See the Data User Guide at https://www.opensecrets.org/resources/datadictionary/UserGuide.

  15. The 111th Congress was the most recently completed Congressional term when I was writing this manuscript.

  16. The data are available at http://voteview.com/dwnominate.asp.

  17. Information on these variables is also obtainable from http://www.opensecrets.org. When it is not very obvious, for example, about his/her race, I also check other sources such as Wikipedia and the politician’s official Web site.

  18. I obtain the data from The American Presidency Project (available at http://www.presidency.ucsb.edu/elections.php).

  19. In most states, the minimum voting age is 18. And in many states, 17-year-old people can vote in primary elections if they will be 18 on or before the day of the general election.

  20. Eleven representatives did not complete the term. Four accepted another position, two ran for governor, two ran for Senate, two resigned due to sexual misconduct, and one died.

  21. All of the results in this paper are unchanged if I use any one of the other two measures.

  22. Congress leadership positions are Speaker, Majority/Minority Leaders, Majority/Minority Whips, Caucus Chair, Conference Chair, Policy Chairs, and Steering Chair. Committee leaderships positions are Chair and Ranking Member of each committee.

  23. Their are 19 House committees that I include in this analysis. Those are Agriculture, Appropriations, Armed Services, Budget, Education and Labor, Energy and Commerce, Financial Services, Foreign Affairs, Homeland Security, House Administration, Intelligence, Judiciary, Natural Resources, Oversight and Government Reform, Rules, Science and Technology, Small Business, Transportation and Infrastructure, Veterans’ Affairs, and Ways and Means. I exclude joint committees.

  24. A politician can be assigned into multiple committees.

  25. I include an indicator variable for each state that has at least three representatives.

  26. One possible reason can be that the Democrats hold the majority in both the Senate and the House in the 111th Congress. And the president was a Democrat (Barack Obama) except for the first two weeks of the 111th Congress.

  27. The F test on the joint hypothesis that the coefficients on ideological strength and ideological strength \(\times \) Republican are jointly zero has a p value of 0.0000, so it can be rejected at the 1 % level.

  28. As in the OLS regressions, I include an indicator variable for each state that has at least three representatives.

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Acknowledgments

This paper is based on Chapter 2 of my Ph.D. thesis at Princeton University. I am deeply indebted to my adviser John Londregan for his advice and support. I am also very grateful to Alan Blinder and Harvey Rosen for their suggestions and encouragement. I also thank Henry Farber, Matias Iaryczower, Dongwon Lee, Heonjae Song, and an anonymous referee for helpful comments.

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  1. Korea Institute of Public Finance, 1924 Hannuri-daero, Sejong, Korea

    Sungmun Choi

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Choi, S. Politician’s ideology and campaign contributions from interest groups. Empir Econ 53, 1733–1746 (2017). https://doi.org/10.1007/s00181-016-1168-3

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