Are PACs Trying to Influence Politicians or Voters?

Abstract

Political Action Committees (PACs) can aect public policies in either of two ways: altering legislators' roll-call voting behavior, or in¯uencing election outcomes. This paper develops a dynamic model demonstrating that the relative importance of the election-in¯uencing channel is easily underestimated. A one-time contribution to a candidate who supports the PAC's position that alters an election outcome yields bene®ts to the PAC as long as that candidate holds oce. In contrast, roll-call vote buying is likely to operate on a quid-pro-quo basis, limiting the PAC's return on investment. Empirical tests based on the theoretical model suggest that PACs value the election-in¯uencing aspect of contributions at least as much as the roll-call vote-buying channel.CAMPAIGN CONTRIBUTIONS by Political Action Committees (PACs) have increased dramatically in the last twenty years. Donations made by PACs to House races grew from $36 million to $120 million (in constant 1992 dollars) between 1974 and 1992, an increase of over 200% in real terms. PACs now account for over one-third of all campaign contributions in House races, and one-fourth of contributions to Senate candidates.In response to the increasing importance of PACs, a great deal of analysis has been devoted to understanding PAC behavior. There are two primary rationales for PAC donations. First, PACs may hope to aect the course of legislation either by``buying votes'' in Congress [e.g., Snyder (1990)], or by altering legislation at the committee stage [Hall and Wayman (1989)]. A second possible goal of PAC support is to in¯uence election outcomes, either by attracting voters directly via candidate endorsement, or indirectly through campaign contributions that the candidate transforms into votes [Austen-Smith (1987); Baron (1989)].In deciding how to allocate campaign contributions across candidates, PACs, need to take into account three (sometimes contradictory) considerations. If the PAC is attempting to in¯uence legislators' votes, then the PAC wants to contribute to winning candidates, typically incumbents, since losing candidates cannot repay favors to the PAC. PACs also want to give to candidates who are on the margin with respect to the PAC's issues. Legislators who staunchly support or oppose the PAC's position are less likely to alter their position in response to campaign contributions than are marginal congressmen. Finally, to the extent that PACs are attempting to in¯uence election outcomes, they want to concentrate contributions on staunch supporters.

The Iceberg Theory of Campaign Contributions: Political Threats and Interest Group Behavior

“…As in the case of SIGs, the difference in means for lopsided winners and close election candidates is statistically significant below the 1 percent level for any of the definitions of closeness considered. Previous studies have documented that even though PACs contribute relatively large amounts to winning candidates in lopsided races, they contribute even more to ones involved in close races (e.g., Levitt 1998). The decomposition of PACs between SIGs and GIGs helps to explain that pattern, with SIGs targeting predominantly lopsided winners, GIGs targeting mainly close election candidates and their combination yielding on net more contributions in close elections.…”

Influence, Elections, and the Value of a Vote in the U.S. House of Representatives

“…find that interest groups give more money to incumbents when they vote in the group's interests and when they are involved in close races. Steven Levitt (1998) shows that the contribution decisions of PACs are consistent with a strong motivation to affect election outcomes. Thomas Stratmann (1998) shows that farm PACs increased their contributions dramatically as elections approached as well as in the weeks surrounding congressional votes on farm subsidy bills, which suggests that both influence and electoral motives are important to PACs.…”

“…Rational PACs, however, will base their contribution decisions not only on how a particular candidate is likely to vote but also on how his or her opponent will vote and on the relative election probabilities of the two candidates. As Levitt (1998) argues, “the most serious obstacle to [estimating models of PAC contribution decisions] is that PAC giving will be a function of the relative positions of the competing candidates on the issues of interest to the PAC. While roll‐call votes, spatial voting models, and interest group ratings provide accurate measures of an incumbent's position on the issues, the corresponding measures are not generally available for challengers.” The dataset used in this paper includes the policy positions of both major party candidates in the general elections to the House of Representatives in 1996, and thus PAC contribution decisions are allowed to depend on the election probabilities of each candidate, the predicted election margin in the district, and the opponent's policy decision.…”

The Blind Man and the Elephant in the Room: Robert Lieberman and the Israel Lobby

“…Not only did Saban give some $13 million himself to the Democratic Party, he also played a key role in persuading others to give as well . See Stratmann 2005, 146;also Stratmann 2002also Stratmann , 1992 For arguments that the impact of campaign contributions on elections may be understated and that they constitute a "long-term investment" in sympathetic politicians, see Levitt 1998 andSnyder 1992. A recent formal analysis determines that interest group giving can bias incumbent behavior when "there is some asymmetry in the resources of the interest groups representing opposing sides of a given issue," in part because lawmakers must "consider the effect of their policy choices on the incentives interest groups have to bankroll an opponent to run against them." These additional ways of using money to affect elections are also discussed by Ansolabehere, Figueiredo, and Snyder 2003.…”