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Electoral and Financial Effects of Changes in Committee Power: The Gramm-Rudman-Hollings Budget Reform, the Tax Reform Act of 1986, and the Money Committees in the House

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  • Milyo, Jeffrey

Abstract

Most rational choice theories of legislatures locate the source of committee power in the restrictive procedural rules that enforce committee jurisdictions. However there is no empirical support for this claim; further, there is little evidence for the natural implication that membership on more powerful committees confers electoral benefits. I address these puzzles by exploiting the occurrence of major budget and tax reforms in the mid-eighties; these reforms provide a natural experiment for measuring the electoral and financial consequences of changes in committee power. The author shows that the procedural rule changes, instituted by the Gramnm-Rudman-Hollings budget reform, caused an increase in campaign contributions to members of the Budget Committee and led to a reduction in the vote share of members of the Appropriations Committee. This heretofore unrecognized effect, of the Gramm-Rudman-Hollings budget reform on the welfare of members of the House, rivals that of a more widely recognized "policy shock," the Tax Reform Act of 1986. Copyright 1997 by the University of Chicago.

Suggested Citation

  • Milyo, Jeffrey, 1997. "Electoral and Financial Effects of Changes in Committee Power: The Gramm-Rudman-Hollings Budget Reform, the Tax Reform Act of 1986, and the Money Committees in the House," Journal of Law and Economics, University of Chicago Press, vol. 40(1), pages 93-111, April.
    • Handle: RePEc:ucp:jlawec:v:40:y:1997:i:1:p:93-111
    DOI: 10.1086/467367
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    References listed on IDEAS

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    1. Bullock, Charles S., 1972. "Freshman Committee Assignments and Re-election in the United States House of Representatives," American Political Science Review, Cambridge University Press, vol. 66(3), pages 996-1007, September.
    2. Grier, Kevin B & Munger, Michael C, 1991. "Committee Assignments, Constituent Preferences, and Campaign Contributions," Economic Inquiry, Western Economic Association International, vol. 29(1), pages 24-43, January.
    3. Robert P. Inman, 1993. "State and local taxation following TRA86: Introduction and summary," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 3-8.
    4. Rohde, David W. & Shepsle, Kenneth A., 1973. "Democratic Committee Assignments in the House of Representatives: Strategic Aspects of a Social Choice Process," American Political Science Review, Cambridge University Press, vol. 67(3), pages 889-905, September.
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    Cited by:

    1. Dharmapala, Dhammika, 2006. "The Congressional budget process, aggregate spending, and statutory budget rules," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 119-141, January.
    2. Ovtchinnikov, Alexei V. & Pantaleoni, Eva, 2012. "Individual political contributions and firm performance," Journal of Financial Economics, Elsevier, vol. 105(2), pages 367-392.
    3. Ilona Babenko & Viktar Fedaseyeu & Song Zhang, 2017. "Do CEOs affect employees' political choices?," BAFFI CAREFIN Working Papers 1750, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    4. Milyo, Jeffrey & Groseclose, Timothy, 1999. "The Electoral Effects of Incumbent Wealth," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 699-722, October.

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