Ezra Klein and Paul Krugman are both highlighting Nate Silver’s analysis of campaign contributions and the public health plan option. The quick summary? Campaign contributions matter – in this case, by about nine senators. Mainly I’m impressed and encouraged that people can use publicly-available data to quickly whip together plausible models answering questions that otherwise we would all just pontificate about.
Coincidentally, I was getting my car inspected this morning and picked up an October 2008 copy of New York Magazine in the waiting room, which had an article about . . . Nate Silver. The article includes a picture of the presidential electoral map as Silver predicted on October 8, in which he called every state correctly except Missouri (which, remember, took a few weeks to figure out whom it had voted for). Most of the article is about how the empirical approach to baseball turns out to be useful in other areas, like politics and public policy.
Update: Mark Thoma points out this counterargument by Brendan Nyhan (who long ago wrote a blog with the brother of one of the best developers at my company). Nyhan says “studies have typically found minimal effects of campaign contributions on roll call votes in Congress,” and cites a Journal of Economic Perspectives paper as backup.
OK, Nyhan may be right. But he may not be.
I looked at that paper. First, it cites a stack of papers that support Silver’s view (that campaign contributions do influence policy). (Of course, it’s common to cite the papers you are trying to refute.) Then it describes a logical argument against Silver’s view (“Tullock’s Puzzle”), which makes no sense to me, at least as summarized there. The argument is that campaign contributions are pitifully small given the amounts of money at stake, and so firms cannot possibly see contributions as an investment in policy. For example:
Dairy producers, who since 1996 have had to have subsidies renewed annually, gave $1.3 million in 2000 and received price supports worth almost $1 billion in the Farm Security and Rural Investment Act of 2002.
I dont’ see the puzzle; if I can get $1 billion in subsidies by paying $1.3 million, why would I pay any more? It seems to me that the explanation here has to do with special-interest politics; no other constituency is sufficiently mobilized to fight against dairy producers, so they get their subsidy. Here’s the conceptual argument: “The figures above imply astronomically high rates of return on investments. In a normal market, with such high rates of return, existing donors should want to increase their contributions.” But this assumes that the “investment return” on campaign contributions is a smooth, monotonic (always increasing) function, which seems fundamentally at odds with the way Congress works. But as I said, maybe Tullock did a better job explaining his puzzle.
Finally, they do a regression of “roll call” votes in Congress against campaign contributions and find little influence. But this analysis has serious limitations in the present context.
First, the dependent variable is the aggregate rating of each legislator by the U.S. Chamber of Commerce. (They got similar results using other organizations.) That is, it’s an average of a large number of votes made in the course of a session on a large number of issues. So the finding is that corporate contributions only pull a legislator a couple of points toward the Chamber of Commerce’s positions overall; but that doesn’t mean that on a given issue, he might switch his vote because of one or two large campaign contributors from the affected industry.
Second, it ignores the complexities of the legislative process. On many key issues, there is no roll call. For example, whether the public plan even comes to a meaningful vote will depend on Harry Reid – who may not even want the public plan – and whether he thinks he has the votes. The power of some members of Congress goes well beyond their individual votes.
Third, the data are from 1978-1994. I’m not a student of American politics, but casually reading The New York Times indicates a few changes in politics since 1994: there is more money; there is more money that is not controlled by political parties (weakening bonds to party, which historically explained a lot of votes); and there is more money that gets spent directly on advertising and is not contributed to political campaigns. This last factor could cut either way, but I think it’s fair to assume that if a company gave you $50,000, they are probably also donating to soft-money groups that take the same positions.
So here we have: on the one hand, a quick-and-dirty model on this specific question by a guy without a Ph.D. in anything (I think), which correctly picks the positions of 87 out of 99 senators (but it’s possible that the model would have done just as well without campaign contributions); on the other hand, a guy with a Ph.D. in political science and a research fellowship in health policy at a very good university, citing a paper by three MIT professors that’s more or less on the same general topic, arguing that campaign contributions don’t affect policy.
By James Kwak