Working Paper: NBER ID: w16667
Authors: Allan Drazen; Ethan Ilzetzki
Abstract: Both conventional wisdom and leading academic research view pork barrel spending as antithetical to responsible policymaking in times of crisis. In this paper we present an alternative view. When agents are heterogeneous in their ideology and in their information about the economic situation, allocation of pork may enable passage of legislation appropriate to a "crisis" that might otherwise not pass. Pork "greases the legislative wheels" not by bribing legislators to accept legislation they view as harmful, but by conveying information about the necessity of policy change, where it may be impossible to convey such information in the absence of pork. Pork may be used for this function in situations where all legislators would agree to forgo pork under full information. Moreover, pork will be observed when the public good is most valuable precisely because it is valuable and the informed agenda setter wants to convey this information.
Keywords: Pork Barrel Spending; Legislative Politics; Asymmetric Information
JEL Codes: D72; E62; H40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| pork barrel spending (H56) | legislative responsiveness to high social value public goods (D72) |
| pork allocation (D45) | passage of legislation (D72) |
| pork allocation (D45) | convey information to other legislators (D72) |
| pork (L66) | enable policy responses reflecting high valuation of public goods (H49) |
| pork (L66) | facilitate information transmission about state of nature (D83) |
| restriction of pork (L66) | diminishes ability to signal necessity of policy changes (D78) |
| restriction of pork (L66) | pooling equilibrium where no informative signaling occurs (D89) |