Concerns that interest groups use their financial resources to distort the democratic process are long-standing. Surprisingly, though, firms spend little money on political campaigns, and roughly 95% of publicly traded firms in the United States have never contributed to a political campaign. Do interest groups seek political access through their modest contributions, or are these contributions only a minor and forgettable part of the political process? In this article, we present comprehensive evidence that interest groups are extremely sophisticated in the way they make campaign contributions. We collect a new data set on U.S. state legislative committee assignments and legislator procedural powers from 1988 to 2014, merged with campaign finance data, in order to analyze over 440,000 candidate-committee observations across 99 legislatures. Using a series of difference-in-differences designs based on changes in individual legislators' positions in the legislature, we not only show that interest groups seek out committee members, but we also show that they value what we call indirect access. When a legislator gains procedural powers, interest groups reallocate considerable amounts of money to her. The results reveal how interest groups in a wide range of democratic settings seek to influence the policy process not only by seeking direct access to policy makers but by seeking indirect access to legislative procedure as well.A cademics, pundits, and politicians alike have long considered how interest groups might use their financial resources in an attempt to influence the political process. Despite how politically salient these concerns about campaign finance are, the overall amounts of money that interest groups donate are surprisingly modest. As a fraction of their operating budgets, U.S. corporations donate remarkably small amounts of money to politics, and roughly 95% of publicly traded firms in America have never made a contribution to any candidate in any campaign. 1 These facts suggest to some that interest Alexander Fouirnaies is Assistant Professor,
Why do industries donate money to legislative campaigns when roll-call votes suggest that donors gain nothing in return? I argue that corporate donors may shape policy outcomes by influencing powerful agenda setters in the early stages of lawmaking. On the basis of a new data set of more than 45,000 individual state legislator sessions , I document how agenda control is deemed valuable to legislators and groups seeking influence on policy. Employing a difference-in-differences design, I assess the revealed price, as measured by campaign contributions, that firms are willing to pay for access to committee and party leaders and document how this price varies across industries and institutions. The results indicate that industries systematically funnel money to the legislative agenda setters by whom they are regulated, and to those endowed with important procedural powers. I document that the value of agenda-setter positions has increased dramatically in recent years. Finally, exploiting changes in state laws, I show that relaxing contribution limits significantly benefits committee chairs and party leaders more so than it does other legislators, suggesting that agenda setters have strong incentives to obstruct restrictive campaign finance reforms.
A classic question about democratic elections is how much they are able to influence politician behavior by forcing them to anticipate future reelection attempts, especially in contexts where voters are not paying close attention and are not well informed. We compile a new dataset containing roughly 780,000 bills, combined with more than 16 million roll-call voting records for roughly 6,000 legislators serving in U.S. state legislatures with term limits. Using an individual-level difference-in-differences design, we find that legislators who can no longer seek reelection sponsor fewer bills, are less productive on committees, and are absent for more floor votes, on average. Building a new dataset of roll-call votes and interest-group ratings, we find little evidence that legislators who cannot run for reelection systematically shift their ideological platforms. In sum, elections appear to influence how legislators allocate their effort in important ways even in low-salience environments but may have less influence on ideological positioning.
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