Funding Mechanisms and Policy Instruments: How Business Campaign Contributions Influence Congressional Votes

Abstract

This study re-examines the influence of business campaign contributions on congressional voting behavior. We find that previous empirical work has not fully considered the distinct funding mechanisms campaign contributors use to channel funds to representatives or the diversity of legislative policy instruments used to reward contributors. We correct these shortcomings by analyzing both individual and PAC campaign contributions from business interests and building several indexes of macro business policy votes in the 105th Congress. These improved measures are used in conjunction with an assumption of “tactical rationality” that predicts legislators utilize diverse policy instruments to balance benefits and costs associated with rewarding business campaign contributors. This theoretical claim is than tested in vote choice models that, in all, account for over fifty business policy votes. Our primary findings are that businesses apparently use campaign contributions to influence favorable regulatory and tax policy votes, but are much less influential on votes for direct government expenditures that benefit business. This difference in influence by policy instrument is especially pronounced regarding contributions from individuals with business interests. We find these results to be entirely consistent with a view of rationality in which representatives seek to trade votes for campaign contributions without the appearance of an embarrassing quid pro quo.