Votes or Money? Theory and Evidence from the Us Congress

61 Pages Posted: 19 Dec 2007 Last revised: 11 Nov 2022

See all articles by Matilde Bombardini

Matilde Bombardini

University of British Columbia (UBC)

Francesco Trebbi

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: December 2007

Abstract

This paper investigates the relationship between the size of interest groups in terms of voter representation and the interest group's campaign contributions to politicians. We uncover a robust hump-shaped relationship between the voting share of an interest group and its contributions to a legislator. This pattern is rationalized in a simultaneous bilateral bargaining model where the larger size of an interest group affects the amount of surplus to be split with the politician (thereby increasing contributions), but is also correlated with the strength of direct voter support the group can offer instead of monetary funds (thereby decreasing contributions). The model yields simple structural equations that we estimate at the district level employing data on individual and PAC donations and local employment by sector. This procedure yields estimates of electoral uncertainty and politicians effectiveness as perceived by the interest groups. Our approach also implicitly delivers a novel method for estimating the impact of campaign spending on election outcomes: we find that an additional vote costs a politician between 100 and 400 dollars depending on the district.

Suggested Citation

Bombardini, Matilde and Trebbi, Francesco, Votes or Money? Theory and Evidence from the Us Congress (December 2007). NBER Working Paper No. w13672, Available at SSRN: https://ssrn.com/abstract=1073652

Matilde Bombardini (Contact Author)

University of British Columbia (UBC) ( email )

2329 West Mall
Vancouver, British Columbia BC V6T 1Z4
Canada

Francesco Trebbi

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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