Working Paper: CEPR ID: DP16842
Authors: Deniz Igan; Thomas Lambert; Prachi Mishra
Abstract: This paper examines the incidence of special interests in the allocation of loans through the Paycheck Protection Program (PPP). We find that lobbying at the firm and industry levels helps obtain larger PPP loans during the pandemic. We also observe that PPP lending is more responsive to lobbying in ideologically less conservative areas as well as in industries less affected by the pandemic. Our findings are consistent with the notion that lobbying firms have experience in navigating administrative and policy complexity and can thus benefit more from aid provided under the PPP.
Keywords: COVID-19; ideology; lobbying; Paycheck Protection Program
JEL Codes: D72; G21; G28; G32; G38; H12; H81
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Lobbying (D72) | Size of PPP Loans (H81) |
| Political Ideology moderates Lobbying Effectiveness (D72) | Size of PPP Loans (H81) |
| Lobbying (D72) | Size of PPP Loans in less conservative areas (H81) |
| Pandemic Impact on Industry (F69) | Lobbying Effectiveness (D72) |