Political Influence within the American Recovery and Reinvestment Act: Evidence from the Broadband Technology Opportunities Program
Posted: 3 Apr 2015
Date Written: November 3, 2014
We analyze the Broadband Technology Opportunities Program, which was part of the 2009 American Recovery and Reinvestment Act (ARRA), to determine the extent to which political influence affected implementation of the program. While other studies analyze the ARRA in totality, we focus on a specific program within the ARRA, the Broadband Technology Opportunities Program, or BTOP, to more clearly distinguish potential political influence. The stated goal of BTOP was to expand broadband access and adoption nationwide, with particular emphasis on improving broadband participation among unserved and underserved populations such as minorities, low-income households, and those living in rural areas. Results show that both Congress and the Executive branch influenced implementation of the program despite independent participation in applications for grants and in the review of such applications. We find that while the application process appears to have been impartial and successful with respect to reaching intended groups, significant political influence over funding occurred, with programs more likely to be funded if submitted under a Democrat governor, from a state with a Democrat voting majority, or from a county with representative on a key Congressional committee. Our results support prior assertions that ARRA funds were misallocated due to the political influence of the executive and legislative branches of government.
Keywords: American Recovery and Reinvestment, broadband, politics, bureaucracy
JEL Classification: H54, H61, L96
Suggested Citation: Suggested Citation