IDEAS home Printed from https://ideas.repec.org/p/not/notnic/2024-12.html
   My bibliography  Save this paper

Foreign influence in US politics

Author

Listed:
  • Marco Grotteria
  • Max Miller
  • S.Lakshmi Naaraayanan

Abstract

This paper documents that foreign lobbying influences US government spending. We introduce a comprehensive dataset of over 230,000 date-stamped, in-person meetings between agents representing foreign governments and individual US legislators, state governors, and employees of US executive agencies from 2000 to 2018. The data suggest that foreign agents meet disproportionately with individuals important for foreign aid and corporate subsidies, like legislators sitting on powerful congressional committees. Foreign agents also maintain connections with legislators even after they depart powerful committees, providing evidence that meetings do not just reflect short-term quid-pro-quo arrangements. Around meetings, foreign countries receive greater amounts of financial aid. Foreign firms whose governments lobby more often also receive larger corporate subsidies from areas the legislators and governors that they meet with represent. Finally, legislators who meet more often with foreign agents receive both monetary and electoral benefits, while we do not find changes in the political contributions they receive or in their probability of re-election, suggesting that legislators are not punished by their constituents for meeting with representatives of foreign countries.

Suggested Citation

  • Marco Grotteria & Max Miller & S.Lakshmi Naaraayanan, 2024. "Foreign influence in US politics," Discussion Papers 2024-12, Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP).
  • Handle: RePEc:not:notnic:2024-12
    as

    Download full text from publisher

    File URL: https://www.nottingham.ac.uk/research/groups/nicep/documents/working-papers/2024/2024-12.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Leonardo Bursztyn & Thomas Chaney & Tarek Alexander Hassan & Aakash Rao, 2021. "The Immigrant Next Door: Exposure, Prejudice, and Altruism," Working Papers 2021-16, Becker Friedman Institute for Research In Economics.
    2. Torsten Persson & Gerard Roland & Guido Tabellini, 2000. "Comparative Politics and Public Finance," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1121-1161, December.
    3. Bernstein, Asaf & Billings, Stephen B. & Gustafson, Matthew T. & Lewis, Ryan, 2022. "Partisan residential sorting on climate change risk," Journal of Financial Economics, Elsevier, vol. 146(3), pages 989-1015.
    4. Matilde Bombardini & Francesco Trebbi, 2020. "Empirical Models of Lobbying," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 391-413, August.
    5. Felbermayr, Gabriel & Kirilakha, Aleksandra & Syropoulos, Constantinos & Yalcin, Erdal & Yotov, Yoto V., 2020. "The global sanctions data base," European Economic Review, Elsevier, vol. 129(C).
    6. Leonardo Bursztyn & Georgy Egorov & Ruben Enikolopov & Maria Petrova, 2019. "Social Media and Xenophobia: Evidence from Russia," NBER Working Papers 26567, National Bureau of Economic Research, Inc.
    7. Konrad B. Burchardi & Tarek A. Hassan, 2013. "The Economic Impact of Social Ties: Evidence from German Reunification," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1219-1271.
    8. Alesina, Alberto & Dollar, David, 2000. "Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
    9. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-1151, December.
    10. Matt Malis & Alastair Smith, 2021. "State Visits and Leader Survival," American Journal of Political Science, John Wiley & Sons, vol. 65(1), pages 241-256, January.
    11. Cailin Slattery & Owen Zidar, 2020. "Evaluating State and Local Business Tax Incentives," Working Papers 261, Princeton University, Department of Economics, Center for Economic Policy Studies..
    12. Nguyen, Bang Dang & Nielsen, Kasper Meisner, 2010. "The value of independent directors: Evidence from sudden deaths," Journal of Financial Economics, Elsevier, vol. 98(3), pages 550-567, December.
    13. Montes-Rojas, Gabriel V., 2013. "Can Poor Countries Lobby for More US Bilateral Aid?," World Development, Elsevier, vol. 44(C), pages 77-87.
    14. William R. Kerr & William F. Lincoln & Prachi Mishra, 2014. "The Dynamics of Firm Lobbying," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 343-379, November.
    15. Jonathan Brogaard & Matthew Denes & Ran Duchin & David Denis, 2021. "Political Influence and the Renegotiation of Government Contracts," The Review of Financial Studies, Society for Financial Studies, vol. 34(6), pages 3095-3137.
    16. Morten Bennedsen & Francisco Pérez‐González & Daniel Wolfenzon, 2020. "Do CEOs Matter? Evidence from Hospitalization Events," Journal of Finance, American Finance Association, vol. 75(4), pages 1877-1911, August.
    17. Bombardini, Matilde & Trebbi, Francesco, 2012. "Competition and political organization: Together or alone in lobbying for trade policy?," Journal of International Economics, Elsevier, vol. 87(1), pages 18-26.
    18. C. Edward Fee & Charles J. Hadlock & Joshua R. Pierce, 2013. "Managers with and without Style: Evidence Using Exogenous Variation," The Review of Financial Studies, Society for Financial Studies, vol. 26(3), pages 567-601.
    19. Hunt Allcott & Matthew Gentzkow, 2017. "Social Media and Fake News in the 2016 Election," NBER Working Papers 23089, National Bureau of Economic Research, Inc.
    20. Arye L. Hillman & Heinrich W. Ursprung, 2008. "Domestic Politics, Foreign Interests, and International Trade Policy," Springer Books, in: Roger D. Congleton & Kai A. Konrad & Arye L. Hillman (ed.), 40 Years of Research on Rent Seeking 2, pages 113-129, Springer.
    21. Hall, Richard L. & Deardorff, Alan V., 2006. "Lobbying as Legislative Subsidy," American Political Science Review, Cambridge University Press, vol. 100(1), pages 69-84, February.
    22. 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.
    23. Atif Mian & Amir Sufi & Francesco Trebbi, 2010. "The Political Economy of the US Mortgage Default Crisis," American Economic Review, American Economic Association, vol. 100(5), pages 1967-1998, December.
    24. Jörg L. Spenkuch & Edoardo Teso & Guo Xu, 2023. "Ideology and Performance in Public Organizations," Econometrica, Econometric Society, vol. 91(4), pages 1171-1203, July.
    25. Hunt Allcott & Luca Braghieri & Sarah Eichmeyer & Matthew Gentzkow, 2020. "The Welfare Effects of Social Media," American Economic Review, American Economic Association, vol. 110(3), pages 629-676, March.
    26. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    27. Torsten Persson & Guido Tabellini, 2002. "Political Economics: Explaining Economic Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661314, December.
    28. Eitan Goldman & Jörg Rocholl & Jongil So, 2013. "Politically Connected Boards of Directors and The Allocation of Procurement Contracts," Review of Finance, European Finance Association, vol. 17(5), pages 1617-1648.
    29. Thomas Fujiwara & Karsten Müller & Carlo Schwarz, 2024. "The Effect of Social Media on Elections: Evidence from The United States," Journal of the European Economic Association, European Economic Association, vol. 22(3), pages 1495-1539.
    30. Bailey, Michael & Gupta, Abhinav & Hillenbrand, Sebastian & Kuchler, Theresa & Richmond, Robert & Stroebel, Johannes, 2021. "International trade and social connectedness," Journal of International Economics, Elsevier, vol. 129(C).
    31. Timothy Werner, 2015. "Gaining Access by Doing Good: The Effect of Sociopolitical Reputation on Firm Participation in Public Policy Making," Management Science, INFORMS, vol. 61(8), pages 1989-2011, August.
    32. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
    33. Cailin Slattery & Owen Zidar, 2020. "Evaluating State and Local Business Incentives," Journal of Economic Perspectives, American Economic Association, vol. 34(2), pages 90-118, Spring.
    34. Karsten Müller & Carlo Schwarz, 2021. "Fanning the Flames of Hate: Social Media and Hate Crime [Radio and the Rise of The Nazis in Prewar Germany]," Journal of the European Economic Association, European Economic Association, vol. 19(4), pages 2131-2167.
    35. Benjamin F. Jones & Benjamin A. Olken, 2005. "Do Leaders Matter? National Leadership and Growth Since World War II," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 835-864.
    36. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    37. MARA FACCIO & RONALD W. MASULIS & JOHN J. McCONNELL, 2006. "Political Connections and Corporate Bailouts," Journal of Finance, American Finance Association, vol. 61(6), pages 2597-2635, December.
    38. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(2), pages 265-286.
    39. 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.
    40. Jacob R. Brown & Ryan D. Enos, 2021. "The measurement of partisan sorting for 180 million voters," Nature Human Behaviour, Nature, vol. 5(8), pages 998-1008, August.
    41. Faccio, Mara & Parsley, David C., 2009. "Sudden Deaths: Taking Stock of Geographic Ties," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 44(3), pages 683-718, June.
    42. Giovanni Maggi & Pinelopi Koujianou Goldberg, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December.
    43. Charles I. Jones & Paul M. Romer, 2010. "The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 224-245, January.
    44. Acemoglu, Daron & Johnson, Simon & Kermani, Amir & Kwak, James & Mitton, Todd, 2016. "The value of connections in turbulent times: Evidence from the United States," Journal of Financial Economics, Elsevier, vol. 121(2), pages 368-391.
    45. Francesco Bianchi & Roberto Gomez Cram & Howard Kung, 2021. "Using Social Media to Identify the Effects of Congressional Viewpoints on Asset Prices," NBER Working Papers 28749, National Bureau of Economic Research, Inc.
    46. Tahoun, Ahmed, 2014. "The role of stock ownership by US members of Congress on the market for political favors," Journal of Financial Economics, Elsevier, vol. 111(1), pages 86-110.
    47. Lauren Cohen & Joshua Coval & Christopher Malloy, 2011. "Do Powerful Politicians Cause Corporate Downsizing?," Journal of Political Economy, University of Chicago Press, vol. 119(6), pages 1015-1060.
    48. Kroszner, Randall S & Stratmann, Thomas, 2005. "Corporate Campaign Contributions, Repeat Giving, and the Rewards to Legislator Reputation," Journal of Law and Economics, University of Chicago Press, vol. 48(1), pages 41-71, April.
    49. Rajan, Raghuram G. & Zingales, Luigi, 2003. "The great reversals: the politics of financial development in the twentieth century," Journal of Financial Economics, Elsevier, vol. 69(1), pages 5-50, July.
    50. Nathan Nunn & Daniel Trefler, 2010. "The Structure of Tariffs and Long-Term Growth," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 158-194, October.
    51. Claudio Ferraz & Frederico Finan, 2011. "Electoral Accountability and Corruption: Evidence from the Audits of Local Governments," American Economic Review, American Economic Association, vol. 101(4), pages 1274-1311, June.
    52. 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.
    53. Ruben Enikolopov & Alexey Makarin & Maria Petrova, 2020. "Social Media and Protest Participation: Evidence From Russia," Econometrica, Econometric Society, vol. 88(4), pages 1479-1514, July.
    54. David Schoenherr, 2019. "Political Connections and Allocative Distortions," Journal of Finance, American Finance Association, vol. 74(2), pages 543-586, April.
    55. Hunt Allcott & Matthew Gentzkow, 2017. "Social Media and Fake News in the 2016 Election," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 211-236, Spring.
    56. Adelino, Manuel & Dinc, I. Serdar, 2014. "Corporate distress and lobbying: Evidence from the Stimulus Act," Journal of Financial Economics, Elsevier, vol. 114(2), pages 256-272.
    57. Kishore Gawande & Pravin Krishna & Michael J. Robbins, 2006. "Foreign Lobbies and U.S. Trade Policy," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 563-571, August.
    58. Gerber, Elisabeth R. & Jackson, John E., 1993. "Endogenous Preferences and the Study of Institutions," American Political Science Review, Cambridge University Press, vol. 87(3), pages 639-656, September.
    59. Ilyana Kuziemko & Eric Werker, 2006. "How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 905-930, October.
    60. Raymond Fisman, 2001. "Estimating the Value of Political Connections," American Economic Review, American Economic Association, vol. 91(4), pages 1095-1102, September.
    61. Thomas Fujiwara & Karsten Müller & Carlo Schwarz, 2021. "The Effect of Social Media on Elections: Evidence from the United States," NBER Working Papers 28849, National Bureau of Economic Research, Inc.
    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. Wei-Fong Pan, 2023. "Does a firm’s lobbying activity respond to its peers’ lobbying activity?," Public Choice, Springer, vol. 194(3), pages 297-324, March.
    2. John M. de Figueiredo & Brian Kelleher Richter, 2013. "Advancing the Empirical Research on Lobbying," NBER Working Papers 19698, National Bureau of Economic Research, Inc.
    3. Olimpia Cutinelli Rendina, 2023. "Lobbying or Innovation: Who Does What Against Foreign Competition," Working Papers halshs-03970033, HAL.
    4. Olimpia Cutinelli Rendina, 2023. "Lobbying or Innovation: Who Does What Against Foreign Competition," PSE Working Papers halshs-03970033, HAL.
    5. Adelino, Manuel & Dinc, I. Serdar, 2014. "Corporate distress and lobbying: Evidence from the Stimulus Act," Journal of Financial Economics, Elsevier, vol. 114(2), pages 256-272.
    6. William R. Kerr & William F. Lincoln & Prachi Mishra, 2014. "The Dynamics of Firm Lobbying," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 343-379, November.
    7. Anne-Laure Delatte & Adrien Matray & Noémie Pinardon-Touati, 2020. "Private Credit Under Political Influence: Evidence from France," Working Papers 2020-56, Princeton University. Economics Department..
    8. Colonnelli, Emanuele & Lagaras, Spyridon & Ponticelli, Jacopo & Prem, Mounu & Tsoutsoura, Margarita, 2022. "Revealing corruption: Firm and worker level evidence from Brazil," Journal of Financial Economics, Elsevier, vol. 143(3), pages 1097-1119.
    9. Park, SeHyun, 2023. "Profitability of politically corrupt firms: Evidence from Romania," Emerging Markets Review, Elsevier, vol. 54(C).
    10. Ozlem Akin & Nicholas S. Coleman & Christian Fons-Rosen & José-Luis Peydró, 2016. "Political Connections: Evidence From Insider Trading Around TARP," Working Papers 935, Barcelona School of Economics.
    11. Papadimitri, Panagiota & Pasiouras, Fotios & Pescetto, Gioia & Wohlschlegel, Ansgar, 2021. "Does political influence distort banking regulation? Evidence from the US," Journal of Financial Stability, Elsevier, vol. 53(C).
    12. Ms. Senay Agca & Ms. Deniz O Igan & Fuhong Li & Ms. Prachi Mishra, 2019. "Doing More for Less? New Evidence on Lobbying and Government Contracts," IMF Working Papers 2019/172, International Monetary Fund.
    13. Jiménez-Durán, Rafael, 2022. "The economics of content moderation: Theory and experimental evidence from hate speech on Twitter," Working Papers 324, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    14. Ozlem Akin & Nicholas S. Coleman & Christian Fons‐Rosen & José‐Luis Peydró, 2021. "Political connections and informed trading: Evidence from TARP," Financial Management, Financial Management Association International, vol. 50(3), pages 619-644, September.
    15. Zhou, Yifan, 2023. "Politically influenced bank lending," Journal of Banking & Finance, Elsevier, vol. 157(C).
    16. Green, Colin P. & HomRoy, Swarnodeep, 2020. "Bringing Connections Onboard: The Value of Political Influence," IZA Discussion Papers 13392, Institute of Labor Economics (IZA).
    17. Luechinger, Simon & Moser, Christoph, 2014. "The value of the revolving door: Political appointees and the stock market," Journal of Public Economics, Elsevier, vol. 119(C), pages 93-107.
    18. Matilde Bombardini & Francesco Trebbi, 2020. "Empirical Models of Lobbying," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 391-413, August.
    19. Cheng, Lei & Sun, Zhen, 2019. "Do politically connected independent directors matter? Evidence from mandatory resignation events in China," China Economic Review, Elsevier, vol. 58(C).
    20. Michelson, Noam, 2023. "The revolving door of former civil servants and firm value: A comprehensive approach," European Journal of Political Economy, Elsevier, vol. 79(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:not:notnic:2024-12. 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: Hilary Hughes (email available below). General contact details of provider: https://edirc.repec.org/data/nicepuk.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.