The Returns from Rent-Seeking: Campaign Contributions, Firm Subsidies and the Byrd Amendment
Working Paper No. 2004-08. 31 pages.
This is the first empirical study to examine Congressional support of an antidumping law that directs the U.S. Customs Service to distribute collected duties to protected firms. The law produces a highly transparent measure of how much each firm is rewarded for its rent-seeking efforts to secure the bill’s passage. Therefore, this policy provides researchers with a unique setting in which to study the link between campaign contributions, Congressional behavior, and the subsequent financial returns to firms. Our empirical results show that campaign contributions from potential beneficiaries increased the likelihood that lawmakers would sponsor the law, and political contributions from the law’s beneficiaries increased with the rewards that they expected to receive.