Behind closed doors
All the President's Friends: Political Access and Firm Value
Jeffrey Brown & Jiekun Huang
NBER Working Paper, April 2017
Abstract:
Using novel data on White House visitors from 2009 through 2015, we find that corporate executives’ meetings with key policymakers are associated with positive abnormal stock returns. We also find evidence suggesting that following meetings with federal government officials, firms receive more government contracts and are more likely to receive regulatory relief (as measured by the tone of regulatory news). The investment of these firms also becomes less affected by political uncertainty after the meetings. Using the 2016 presidential election as a shock to political access, we find that firms with access to the Obama administration experience significantly lower stock returns following the release of the election result than otherwise similar firms. Overall, our results provide evidence suggesting that political access is of significant value to corporations.
Rewarding Dysfunction: Interest Groups and Intended Legislative Failure
Jeremy Gelman
Legislative Studies Quarterly, forthcoming
Abstract:
Why do majority parties choose to add extreme dead on arrival bills to their legislative agendas rather than enactable legislation? Majorities in Congress choose this strategy in order to accrue political support from their allied interest groups who reliably reward this legislative behavior. By examining all bills that receive floor consideration from 2003 through 2012, as well as interest group scorecards and campaign commercials, I find support for my theory. Dead-on-arrival bills generate electoral benefits for majority-party lawmakers, are more politically valuable than other bills, and are more often used to credit rather than punish legislators.
Electoral Contributions and the Cost of Unpopularity
Thomas Bassetti & Filippo Pavesi
Economic Inquiry, forthcoming
Abstract:
When considering electoral campaigns, candidates receiving contributions from relatively unpopular industries should be regarded less favorably by voters that have information on the sources of funding. To offset this unpopularity effect, politicians may either demand more money for campaign advertising from these industries in order to persuade less informed voters, or shy away from unpopular contributors to avoid losing the support of the informed electorate. Our model predicts that the first effect dominates, and electoral contributions are increasing in industry unpopularity. By using U.S. House elections data and different identification strategies, we provide robust evidence in favor of our predictions.
More politicians, more corruption: Evidence from Swedish municipalities
Andreas Bergh, Günther Fink & Richard Öhrvall
Public Choice, forthcoming
Abstract:
In the literature on political economy and public choice, it is typically assumed that government size correlates positively with public corruption. The empirical literature, however, is inconclusive, owing to both measurement problems and endogeneity. This paper creates a corruption index based on original data from a survey covering top politicians and civil servants in all Swedish municipalities. The effect of more politicians on corruption problems is analyzed using discontinuities in the required minimum size of local councils. Despite the fact that Sweden consistently has been ranked among the least corrupt countries in the world, the survey suggest that non-trivial corruption problems are present in Sweden. Municipalities with more local council seats have more reported corruption problems, and the regression discontinuity design suggests that the effect is causal.
Insider or Outsider? Grand Corruption and Electoral Accountability
Monika Bauhr & Nicholas Charron
Comparative Political Studies, forthcoming
Abstract:
While democratic accountability is widely expected to reduce corruption, citizens to a surprisingly large extent opt to forgo their right to protest and voice complaints, and refrain from using their electoral right to punish corrupt politicians. This article examines how grand corruption and elite collusion influence electoral accountability, in particular citizens’ willingness to punish corrupt incumbents. Using new regional-level data across 21 European countries, we provide clear empirical evidence that the level of societal grand corruption in which a voter finds herself systematically affects how she responds to a political corruption scandal. Grand corruption increases loyalty to corrupt politicians, demobilizes the citizenry, and crafts a deep divide between insiders, or potential beneficiaries of the system, and outsiders, left on the sidelines of the distribution of benefits. This explains why outsiders fail to channel their discontent into effective electoral punishment, and thereby how corruption undermines democratic accountability.
Cities as Lobbyists
Rebecca Goldstein & Hye Young You
American Journal of Political Science, forthcoming
Abstract:
Individual cities are active interest groups in lobbying the federal government, and yet the dynamics of this intergovernmental lobbying are poorly understood. We argue that preference incongruence between a city and its parent state government leads to underprovision of public goods, and cities need to appeal to the federal government for additional resources. We provide evidence for this theory using a data set of over 13,800 lobbying disclosures filed by cities with populations over 25,000 between 1999 and 2012. Income inequality and ethnic fragmentation are also highly related to federal lobbying activities. Using an instrumental variables analysis of earmark and Recovery Act grant data, we show that each dollar a city spends on lobbying generates substantial returns.
Don't Sweat the Details! Enhancing Congressional Committee Expertise Through the Use of Detailees
Russell Mills & Jennifer Selin
Legislative Studies Quarterly, forthcoming
Abstract:
In contrast to the dramatic growth in the size and influence of the executive branch over the past 40 years, congressional committee staffing levels are at an all-time low. Faced with growing demands to produce legislation and to conduct oversight of executive branch policymaking, Congress can and does supplement its existing staff by borrowing personnel, known as detailees, from federal agencies. Using an original dataset of detailees from 1997 to 2015, we analyze the degree to which congressional committees rely on detailees to increase legislative capacity. We find that committees in the House and Senate use detailees in different ways to further both legislative and oversight initiatives.
County governing boards: Where are all the women?
Leander Kellogg et al.
Politics, Groups, and Identities, forthcoming
Abstract:
This research seeks to explore the extent of women representation on county governing boards and tests several hypotheses to explain variation in representation. This study evaluates a random sample of 394 of the more than 3000 counties in the United States. Half of the counties did not have any women serving on their county governing boards. A two-stage analysis using first a logit model sought to explain when counties have women commissioners and then a truncated regression analysis evaluated the percentage of women serving on county boards. Size of governing boards, size of government, religious adherence, and two election formats had significant effects in explaining when a county had women commissioners. Three variables (religious adherence, level of support for President Obama, and size of governing boards) were significant in explaining the percentage of women serving on county governing boards with size of the boards operating opposite of the hypothesized direction.
Does a Firm's Political Capital Affect Its Investment and Innovation?
Tae Kim
University of Notre Dame Working Paper, May 2017
Abstract:
This paper shows that political capital is an important determinant of corporate investment and innovation. Using unexpected exits of legislators from the U.S. Congress, I find that a firm that suddenly loses political capital increases capital expenditures and R&D spending. Surprise losses of political capital result in negative announcement returns, reduced profitability, and reduced sales to the government. The competitors of a firm that loses political capital show positive announcement returns on the exit event. The results suggest that there is an industry equilibrium in which political capital can be used to enhance barriers to entry and first-mover advantage.
Public Perception of the Presidential Toolkit
Kenneth Lowande & Thomas Gray
Presidential Studies Quarterly, forthcoming
Abstract:
Studies of unilateral power typically analyze a single tool of presidential action (e.g., executive orders, memoranda, proclamations, and signing statements) in relative isolation. But scholars have long recognized that presidents boast a diverse toolkit with particular actions possessing variable suitability for a given political circumstance. We investigate one mechanism by which presidents may choose one tool over another: political cost. Specifically, we ask: does public perception of policy movement vary with the means used to alter the status quo? Leveraging a survey experiment conducted after the 2014 midterm elections, we find support for the idea that presidents have strong incentives to take action — any action — but that more salient means like executive orders have the potential to damage respondents’ evaluations of policy change. We report initial evidence that the means of unilateral action are endogenous to political circumstances and that studies that analyze them in isolation may be vulnerable to bias.
Stealth Democracy Revisited: Reconsidering Preferences for Less Visible Government
Kathryn VanderMolen
Political Research Quarterly, forthcoming
Abstract:
Understanding public preferences for governing processes is an understudied area of research. In this paper, I evaluate a set of critical assumptions relating to process preferences that the literature has thus far not addressed. I specifically address the claims made by John Hibbing and Elizabeth Theiss-Morse in their seminal book, Stealth Democracy, which suggests that people prefer political decisions to be made via expert-based governing arrangements to promote a level of efficiency and effectiveness within the government that elected officials cannot provide. Using original questions from the 2014 Cooperative Congressional Election Study, I find concurring evidence that citizens are not strongly attached to standard participatory processes found in democracy. However, upon using more precise measurements and placing expert processes into contemporary context, preferences weaken and appear to be shallow in nature. In an era where process preferences are receiving more attention as trust in government wanes, it is important to understand the depth of these preferences and their potential to change politics. These results suggest it is imperative for future scholars to approach the study of process preferences with care.
Local Capitalism and Civic Engagement: The Potential of Locally Facing Firms
Jill Clark & Matthew Record
Public Administration Review, forthcoming
Abstract:
The twin forces of globalization and devolution have created administrative circumstances that strain the problem-solving capacity of local governments and increase the importance of nongovernmental processes and institutions. The literature suggests that locally owned firms are more likely to engender higher levels of civic engagement critical to buttressing that problem-solving capacity. This research adds an additional dimension, investigating to whom those firms sell and through which supply channels. Using survey results from hundreds of local firms across five study sites, this research demonstrates that locally facing firms — that is, firms that intentionally interface with community members and other local businesses — are associated with greater levels of civic and political engagement compared with locally owned firms that sell their products to customers elsewhere. Findings suggest that local governments should look beyond the local/nonlocal ownership binary to consider how private firms can be partners in serving and supporting their communities.
Compensation, Opportunity, and Information: A Comparative Analysis of Legislative Nonresponse in the American States
David Fortunato & Tessa Provins
Political Research Quarterly, forthcoming
Abstract:
We present a parsimonious framework for understanding contextual variation in legislative nonresponse. We argue that legislators’ propensity to vote is a function of their willingness and ability to be physically present in the chamber and determine the best position to take on a given proposal. From this framework, we derive four hypotheses regarding the compensation legislators receive, their opportunity to pursue work outside of the chamber, and their informational resources. Analyzing data on over seven million voting opportunities across two sessions in ninety-nine chambers, we find robust evidence that longer legislative sessions decrease nonresponse and that informational resources increase nonresponse, but no evidence that compensation influences nonresponse.