A study of campaign finance: PACs as principals and agents
Abstract
The purpose of this study was to analyze campaign contribution patterns to incumbent members of Congress from political action committees (PACs). This study uses a unique dataset that spans seven election cycles (1977-90) and contains contribution data and descriptive data on every candidate and PAC during that time. I make predictions about campaign contribution patterns by developing a formal principal-agent model of the PAC/legislator relationship. Unlike previous studies, this study generates refutable predictions about the contribution patterns that hold in spite of inherent informational asymmetries that exist between the PAC and the legislators. The model predicts and the results indicate that PACs contribute to effective legislators where effectiveness is measured by committee assignment, committee seniority, and party affiliation. Also, a model is developed to explain possible connections between campaign contribution patterns (that is, rent seeking expenditures) and market power. The model predicts a positive relationship which is partially borne out by the empirical results. It appears that the relationship is quite weak however. Furthermore, an empirical study (using TOBIT models) of the campaign contribution patterns of 33 PACs representing industry, labor, and non-affiliated groups is performed. The results indicate that the PACs contribute to legislators who are members of relevant congressional committees.
Degree
Ph.D.
Advisors
Barron, Purdue University.
Subject Area
Economics|Political science
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