IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/44220.html
   My bibliography  Save this paper

Three's company: Wall Street, Capitol Hill, and K Street

Author

Listed:
  • Igan, Deniz
  • Mishra, Prachi

Abstract

This paper explores the link between the political influence of the financial industry and financial regulation in the run-up to the global financial crisis. We construct a detailed database documenting the lobbying activities, campaign contributions, and political connections of the financial industry from 1999 to 2006 in the United States. We find evidence that spending on lobbying by the financial industry and network connections between lobbyists and the legislators were positively linked to the probability of a legislator changing positions in favor of deregulation. The evidence also suggests that hiring connected lobbyists who had worked for legislators in the past enhanced this link.

Suggested Citation

  • Igan, Deniz & Mishra, Prachi, 2011. "Three's company: Wall Street, Capitol Hill, and K Street," MPRA Paper 44220, University Library of Munich, Germany, revised Aug 2012.
    • Handle: RePEc:pra:mprapa:44220
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/44220/1/MPRA_paper_44220.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Efraim Benmelech & Tobias J. Moskowitz, 2010. "The Political Economy of Financial Regulation: Evidence from U.S. State Usury Laws in the 19th Century," Journal of Finance, American Finance Association, vol. 65(3), pages 1029-1073, June.
    2. Braun, Matias & Raddatz, Claudio, 2009. "Banking on politics," Policy Research Working Paper Series 4902, The World Bank.
    3. Jordi Blanes i Vidal & Mirko Draca & Christian Fons-Rosen, 2012. "Revolving Door Lobbyists," American Economic Review, American Economic Association, vol. 102(7), pages 3731-3748, December.
    4. Marianne Bertrand & Matilde Bombardini & Francesco Trebbi, 2014. "Is It Whom You Know or What You Know? An Empirical Assessment of the Lobbying Process," American Economic Review, American Economic Association, vol. 104(12), pages 3885-3920, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kempf, Elisabeth, 2017. "The Job Rating Game: The Effects of Revolving Doors on Analyst Incentives," Working Papers 258, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    2. Deniz Igan & Prachi Mishra, 2014. "Wall Street, Capitol Hill, and K Street: Political Influence and Financial Regulation," Journal of Law and Economics, University of Chicago Press, vol. 57(4), pages 1063-1084.
    3. John M. de Figueiredo & Brian Kelleher Richter, 2013. "Advancing the Empirical Research on Lobbying," NBER Working Papers 19698, National Bureau of Economic Research, Inc.
    4. Cameron K. Murray & Paul Frijters & Markus Schaffner, 2021. "Is transparency an anti-corruption myth?," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 5(1), pages 27-43, Septembre.
    5. Tarek A Hassan & Stephan Hollander & Laurence van Lent & Ahmed Tahoun, 2019. "Firm-Level Political Risk: Measurement and Effects," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 2135-2202.
    6. Alessandro De Chiara & Marco A. Schwarz, 2020. "A Dynamic Theory of Regulatory Capture," Working Papers 2020-12, Faculty of Economics and Statistics, Universität Innsbruck.
    7. Marianne Bertrand & Matilde Bombardini & Raymond Fisman & Brad Hackinen & Francesco Trebbi, 2021. "Hall of Mirrors: Corporate Philanthropy and Strategic Advocacy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(4), pages 2413-2465.
    8. Adam Fremeth & Brian Kelleher Richter & Brandon Schaufele, 2018. "Spillovers from regulating corporate campaign contributions," Journal of Regulatory Economics, Springer, vol. 54(3), pages 244-265, December.
    9. Luigi Zingales, 2011. "Comment on "A Fistful of Dollars: Lobbying and the Financial Crisis"," NBER Chapters, in: NBER Macroeconomics Annual 2011, Volume 26, pages 236-243, National Bureau of Economic Research, Inc.
    10. Laurent Bouton & Paola Conconi & Francisco Pino & Maurizio Zanardi, 2021. "The Tyranny of the Single-Minded: Guns, Environment, and Abortion," The Review of Economics and Statistics, MIT Press, vol. 103(1), pages 48-59, March.
    11. Jordi Blanes i Vidal & Mirko Draca & Christian Fons-Rosen, 2012. "Revolving Door Lobbyists," American Economic Review, American Economic Association, vol. 102(7), pages 3731-3748, December.
    12. Cesi Cruz & Benjamin A. T. Graham, 2022. "Social ties and the political participation of firms," The Review of International Organizations, Springer, vol. 17(1), pages 117-142, January.
    13. Olimpia Cutinelli Rendina, 2023. "Lobbying or Innovation: Who Does What Against Foreign Competition," Working Papers halshs-03970033, HAL.
    14. Thomas Groll & Christopher J. Ellis, 2017. "Repeated Lobbying By Commercial Lobbyists And Special Interests," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1868-1897, October.
    15. Igan, Deniz & Lambert, Thomas & Wagner, Wolf & Zhang, Eden Quxian, 2022. "Winning connections? Special interests and the sale of failed banks," Journal of Banking & Finance, Elsevier, vol. 140(C).
    16. Laurent Bouton & Paola Conconi & Francisco Pino & Maurizio Zanardi, 2018. "Guns, Environment, and Abortion: How Single-Minded Voters Shape Politicians' Decisions," Working Papers wp459, University of Chile, Department of Economics.
    17. Ulrich Matter & Paolo Roberti & Michaela Slotwinski, 2019. "Vote Buying in the US Congress," CESifo Working Paper Series 7841, CESifo.
    18. Polk Andreas, 2020. "What do we Know About Lobbying in Germany?," Review of Economics, De Gruyter, vol. 71(1), pages 43-79, April.
    19. Olimpia Cutinelli Rendina, 2023. "Lobbying or Innovation: Who Does What Against Foreign Competition," PSE Working Papers halshs-03970033, HAL.
    20. Miguel Espinosa, 2021. "Labor Boundaries and Skills: The Case of Lobbyists," Management Science, INFORMS, vol. 67(3), pages 1586-1607, March.

    More about this item

    Keywords

    Lobbying; PAC; Financial Regulation;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:44220. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.