I came across this paper by Sanford Gordon, Catherine Hafer, and Dimitri Landa, who write:
Do individuals give political contributions simply because they derive an expressive or other consumption benefit from doing so? Or are they attempting to influence policy outcomes? If the consumption view is correct, then political donations are just another means by which citizens participate in the political process (unequal to be sure), and need not imply improper or undemocratic influence. In contrast, donation decisions that are driven by an investment motivation, especially when they are made on behalf of small but economically powerful minority interests, naturally raise concerns about the possibility of an undemocratic exchange of policy for dollars.
We [Gordon et al.] propose a strategy to distinguish investment and consumption motives for political contributions by examining the behavior of individual corporate executives. If executives expect contributions to yield policies beneficial to company interests, those whose compensation varies directly with corporate earnings should contribute more than those whose compensation comes largely from salary alone. We find a robust relationship between giving and the sensitivity of pay to company performance, and show that the intensity of this relationship varies across groups of executives in ways that are consistent with instrumental giving but not with alternative, taste-based, accounts. Together with earlier findings, our results suggest that contributions are often best understood as purchases of “good will” whose returns, while positive in expectation, are contingent and rare.
The empirical part of the paper looks cool–I have no experience looking at this sort of data and so can’t really say anything beyond “it’s cool.” (Well, I will say that I’d like to see a scatterplot to make it clear at a glance what their data are saying.) But I do have some thoughts on the general framework. They consider political contributions as “consumption” or “investment”–which, as far as I know, follows the mainstream of the discipline, but I have a problem with this approach.
I just don’t really see the clear distinction between “consumption” and “investment” in this context.
If someone is contributing from an “expressive or other consumption benefit,” presumably this person is giving to the candidate whose policies he or she favors. (Perhaps there are some people who give to the other side for reputational reasons, for example an oil company executive who happens to be a Democrat might give to a Republican so he won’t stand out in the crowd, or a college professor might donate to Obama to fit in, even if he’s actually a McCain supporter. Or maybe it could go the other way too, that someone would donate $20 to the other side just to get a reputation for being unorthodox. But I imagine this sort of thing represents only a very tiny minority of contributions.) Conversely, someone who’s donating as an investment probably thinks that his or her candidate is good for the country as a whole. As the authors note, the translation of unequal financial resources to unequal political resources is a potential distortion of the democratic process–I just don’t understand this distinction, especially in light of the fact that voting and small-dollar political contributions are rational to the extent that the voter or contributor believes that his or her preferred candidate will benefit the general good.