Power and the Money, Money and the Power: A Network Analysis of Donations from American Corporate to Political Leaders
56 Pages Posted: 8 Apr 2021
Date Written: March 20, 2021
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 associated with the same firm or industry are substantially more likely to donate to the same candidates in all the elections 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.
Keywords: Donations, Campaign Contributions, Networks
JEL Classification: D72, L14
Suggested Citation: Suggested Citation