Working Paper: CEPR ID: DP16966
Authors: Edoardo Teso
Abstract: Do U.S. corporate elites contribute to political campaigns purely motivated by ideological considerations – as typically assumed by the literature on individual donors’ drivers of contributions – or are their donations also a tool of political influence? I investigate this question using a new panel on the contributions to members of U.S. Congress (MCs) by 401,557 corporate leaders of 14,807 U.S. corporations over the 1999-2018 period. I show that donations increase by 11% when a politician is assigned to a committee dealing with policy issues relevant to a corporate leader’s company. The effect is driven by donations to MCs with the greatest power in the committees. The estimates suggest that (i) 13% of the observed gap in corporate leaders’ donations to policy relevant versus other MCs is driven by an influence-seeking motive, and (ii) the total corporate leaders’ donations that are driven by the influence-seeking motive are about 53% of the overall donations by their companies’ PACs to all MCs over the same period.
Keywords: campaign finance; lobbying; US Congress
JEL Codes: D72; G38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| MC assigned to relevant committee (F53) | donations by corporate leaders (D64) |
| donations by corporate leaders (D64) | influence-seeking motive (D72) |
| MC assigned to relevant committee (F53) | likelihood of donations to majority party MCs (D79) |
| MC assigned to relevant committee (F53) | likelihood of donations to minority party MCs (D79) |
| election cycles prior to 2010 Citizens United decision (D72) | influence-seeking motive (D72) |