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Power and the money, money and the power: A network analysis of donations from American corporate to political leaders

Author

Listed:
  • James Rockey

    (University of Birmingham)

  • Nadia Zakir

    (University of Leicester)

Abstract
American corporate and political elites are connected by the donations that the latter receive from the former. Using a novel dataset, this paper analyzes these connections as a social network. This analysis uncovers the changing structure of this network, and thus of the changing nature of money in US politics. In particular, beyond the well understood increase in the scale of donations, we document how donation patterns have become more polarized and more concentrated. We show that the determinants of this network’s structure have remained broadly constant over time. Donors connected to the same firms or industries are much more likely to donate to the same candidates than those who are not, during every election we study. Likewise, politicians serving on the same congressional committees have been consistently more likely to receive campaign funds from the same donors. Yet, there has been a transformation in the concentration of donations on a small number of donors and recipients connected with a small number of committees and a small number of industries. This concentration is reflected in substantial increases in the power (centrality) of the most important donors and politicians.

Suggested Citation

  • James Rockey & Nadia Zakir, 2021. "Power and the money, money and the power: A network analysis of donations from American corporate to political leaders," Discussion Papers 21-03, Department of Economics, University of Birmingham.
    • Handle: RePEc:bir:birmec:21-03
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    References listed on IDEAS

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    More about this item

    Keywords

    Donations; Campaign Contributions; Networks;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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