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Why the donor class still matters: An exclusive look at the insidious effects of money in politics

Political science shows how money in politics promotes extremism and leads politicians to favor donors over voters


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Sean McElwee
June 6, 2016 9:57am (UTC)

Over the last decade, the idea that money in politics is less threatening than reformers suggest has marched from hot take to conventional wisdom. The crash-and-burn of Jeb Bush’s heavily funded campaign has led increasing numbers of commentators to declare that the threat of money in politics is either overrated or simply non-existent. But, as I’ve written before, this argument is flawed because it ignores the way that the donor class shapes political constraints. Alex Amend of the Southern Poverty Law Center

Alex Amend of the Southern Poverty Law Center compares these nay-sayers to those who claim global warming isn’t real because it’s cold during the winter. The reality is that examining only roll call voters and presidential elections isn’t the best place to see the influence of money in politics. The Koch Brothers’  recent decision to withdraw from national politics shows they’ve learned this lesson the hard way. A bevy of new studies, many examined here for the first time, suggests that money does indeed matter — and it’s hampering representation.

Who Are The Donors?

As I previously showed in my report on Chicago, the donor class is heavily distorted towards white, wealthy and male donors. However, political scientists have extensively debated what exactly motivates donors.  In a recent study, political scientists Michael J. Barber, Brandice Canes-Wrone and Sharece Thrower find that individual donors give to candidates that match their ideology. They also find that they donate strategically to incumbents that are on a committee related to the donor's profession (and this occurs even among donors who claim they’re not donating to benefit their industry). Political scientists Seth Hill and Gregory Huber also find that donors are more ideologically extreme than non-donors. However, they find that within parties, donations are only weakly related to ideology.

In a new study, discussed here for the first time ever, leading campaign finance scholars Jesse Rhodes, Brian Schaffner and Raymond La Raja shed some light on this confusion by exploring how donors differ strategically in their contributions. They argue there are four types of donors. Some focus on national elections and political parties, others focus on state and local elections, others on ideological groups and PACs and finally those who invest strategically. As the chart below shows, strategic investors dominate in most elections, though in midterms, locally oriented donors come close. They find the wealthiest, and most ideological donors tend to be strategic investors.

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Other studies have noted that donors are concentrated in unique locations geographically. In another study, political scientists James Gimpel, Frances Lee and Shanna Pearson-Merkowitz find that big donors are concentrated in wealthy and highly educated districts and that they donate strategically and ideologically. In another study,  Brittany Bramlett, James Gimpel and Frances Lee show these donors have views that can be best described as “cosmopolitan” or “libertarian” — more supportive of free trade, abortion and immigration, but generally opposed to gun rights.

Why The Donor Class Matters

Recent evidence from political scientist Michael Barber shows that senators tend to represent donors, rather than voters. He also shows that the wealthy overall receive less representation than wealthy donors. Even in election years, when the electoral constraints on Senators would be strongest, they still represent donors more than their voters, even voters of the same party. A new study by political scientist Anne. E Baker examines House members and shows that, “dependency on outside contributions decreases members’ responsiveness to their districts and increases the member's’ ideological extremity.” That is, the more money a candidate draws from outside her district, the less responsive to her constituents she will be.

Other evidence suggests that money in politics is driving political extremism. In their book, "Campaign Finance and Political Polarization", Brian Schaffner and Ray La Raja show that when individual donors dominate a state’s campaign finance landscape, they intensely polarize the legislature. They also find that more powerful parties lead to the selection of more moderate legislators (though some have disputed this claim).  Political scientist Michael Barber finds that states with higher limits on contributions from individual contributors have more polarized legislators, because individual donors are more polarized. But he argues that  PACs (which are primarily interested in access, not ideology) tend to favor more moderate candidates.

Research by political scientist Andrew Hall suggests that extreme candidates who win primaries over a more moderate candidate win a lower share of the general election vote.  However, in a recent study political scientists Walter Stone and Elizabeth Simas finds that candidates may gain a fundraising advantage by taking extreme positions, thereby increasing their chances of winning. Given that individual contributions account for 50% of the fundraising for House candidates, the incentive to take extreme positions could be large. Further, as districts become less competitive and electoral contests more expensive, candidates may strategically chose to serve the interests of donors rather than voters (recent research suggesting the link between vote share and roll call votes has diminished support this).

Money Influences Politics Subtly

There is other evidence that donors have influence. Political scientist Christopher Witko has shown quite persuasively in a series of studies how donors can influence the bureaucratic and contracting process. Campaign finance scholar Eleanor Neff Powell finds that members of congress are more likely to vote for the agendas of members who have provided them financial assistance. Powell, who is currently working on a book called "Where Money Matters in Congress" tells me, “Most people focus on how campaign contributions influence roll call votes--essentially looking for quid pro quo exchanges. And, for the most part, that doesn't usually happen.  Instead, money influences politics in more subtle, less visible ways.” In a study with Justin Grimmer, Powell explores the impact of committee exile on contributions. They find that when a legislator is removed from a committee after their party loses majority status, PACs in the relevant industry cease donations to the legislators, and flip to those of the opposing party (see chart).  

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Their finding is supported by other studies in the literature. One study examined the effect of Sen. Jim Jeffords’ famous flip from Republican to Democrat in 2001. The study, by economist Seema Jayachandadran finds, “a firm lost 0.8% of market capitalization the week of Jeffords’ switch for every $250,000 it gave to the Republicans in the previous election cycle.” In an early study, Thomas Romer and James Snyder found that  PACs shift their contributions to politicians based on committee assignments. At the state level, Andrew Hall finds that corporate contribution bans can have large effects on electoral outcomes. The chart below shows that bans increase Democrat seat shares. The reason is that in absence of a ban, Republicans dominate the campaign finance landscape, and that a 1 point increase in a party’s share of the contributions boosts the party’s seat share by nearly half a point.

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Conclusion

Those who downplay the role of money in politics tend to do so by highlighting the areas in which money matters the least - high-profile Presidential elections. There is strong evidence that in other areas: bureaucracy, state legislatures, government contracts and committees, money shapes the agenda and ensures powerful people and corporations will at least be heard. I’ve argued before that money in politics generates an inequality of voice. In his new book, "Pay-to-Play Politics", political scientist Heath Brown shows that there has been renewed interest from political scientists in exploring the complex ways that money, especially huge amounts of money from a small group of campaign contributors and the business sector, may influence politics in more subtle ways. He tells Salon, We see scholars asking new research questions, using novel data sets and cutting-edge methodologies, and starting to advance an understanding of the often hidden and subtle ways money shapes American politics. This is a fortunate turn as we approach the most expensive election in US history.”

As Obama and Chris Murphy have poignantly noted, they spend most of their time listening to the concerns of the wealthy, rather than average Americans. It’s important not to exaggerate the role of money in politics, but it’s certainly true that “money talks,” and when it does, average Americans won’t be heard.

 


Sean McElwee

Sean McElwee is a Salon contributor and a policy analyst at Demos Action. His writing may be viewed at seanamcelwee.com. Follow him on Twitter at @seanmcelwee.

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