In the following blog post, the author summarizes the forthcoming American Journal of Political Science article titled “When Are Agenda Setters Valuable?“:
It is well known that firms and industry organizations contribute significant amounts to legislative campaigns in the U.S. However, most studies fail to show that these contributions affect how legislators behave. Why do industries donate money to legislative campaigns when roll-call votes suggest that donors gain nothing in return?
In the paper “When Are Agenda Setters Valuable?”, I argue that corporate donors may shape policy outcomes by influencing powerful agenda setters in the early stages of lawmaking. On the basis of a new dataset of more than 45,000 individual state-legislator sessions (1988- 2012), I document how agenda control is deemed valuable to legislators and groups seeking influence on public policy.
Employing a difference-in-differences design, I assess the revealed price, as measured by campaign contributions, that firms are willing to pay for access to committee and party leaders and document how this price varies across industries and institutions. The basic idea is to compare a legislator’s donations before and after he attains a committee- or party-leader position while washing out general trends in contributions in the chamber.
The results indicate that agenda-setting powers are very valuable. On average, a party-leader position causes almost a 40% increase in contributions, and this effect is even stronger in chambers where leaders are endowed with significant procedural powers.
Attaining a committee-chair position approximately leads to a 20% increase in contributions, and the effect is primarily driven by donations from industries that are regulated by the committee.
Moreover, the value of attaining committee- and party-leader positions has grown dramatically and more than doubled in recent years.
Finally, exploiting changes in state laws, I show that relaxing contribution limits significantly benefits committee chairs and party leaders more so than it does other legislators, suggesting that agenda setters have strong incentives to obstruct restrictive campaign finance reforms.
The results have implications for our interpretation of the literature on money in American politics. For obvious reasons, roll-calls are only recorded for bills that reach the floor, and if, as the results in this paper may suggest, committee and party leaders prevent certain bills from reaching the floor in exchange for contributions, the existing literature has systematically underestimated the influence of campaign donations on public policy in American politics.
About the Author: Alexander Fouirnaies is an Assistant Professor of Political Economy at Harris School, University of Chicago. Fouirnaies’ article “When Are Agenda Setters Valuable?” is now available for Early View and will appear in a forthcoming issue of the American Journal of Political Science.
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