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Agency Independence, Campaign Contributions, and Favoritism in US Federal Government Contracting
Editors
Title / Series / Name
Journal of Public Administration Research and Theory
Publication Volume
33
Publication Issue
2
Pages
Editors
Keywords
Campaign contributions
Campaign donations
Favoritism
Campaign donations
Favoritism
URI
http://hdl.handle.net/20.500.14018/13783
Abstract
The impacts of money in US politics have long been debated. Building on principal-agent models, we test whether and to what degree companies’ political donations lead to their favored treatment in federal procurement. We expect the impact of donations on favoritism to vary by the strength of control by political principals over their bureaucratic agents. We compile a comprehensive dataset of published federal contracts and registered campaign contributions for 2004–15. We develop risk indices capturing tendering practices and outcomes likely characterized by favoritism. Using fixed effects regressions, matching, and regression discontinuity analyses, we find confirming evidence for our theory. A large increase in donations from $10,000 to $5m (in USD) increases favoritism risks by about 1/4th standard deviation (SD). These effects are largely partisan, with firms donating to the party that holds the presidency showing higher risk. Donations influence favoritism risks most in less independent agencies: the same donation increases the risk of favoritism by an additional 1/3rd SD in agencies least insulated from politics. Exploiting sign-off thresholds, we demonstrate that donating contractors are subject to less scrutiny by political appointees.
Topic
Publisher
Place of Publication
Type
Journal article
Date
2023
Language
ISBN
Identifiers
10.1093/jopart/muac026