Foreign Influence in US Politics

Abstract

We document that foreign lobbying shapes US government spending and public policy. We introduce a comprehensive dataset of 180,000 date-stamped, in-person meetings between foreign agents and individual US legislators, spanning 2000 to 2018 and covering 146 countries and 1,200 legislators. We find that (1) meetings are positively related to legislator lawmaking effectiveness and membership to foreign affairs committee and (2) foreign agents maintain connections with legislators even after they depart from important committees. Around these meetings, (3) foreign countries benefit from increased financial aid and advantageous product tariffs and (4) foreign firms whose governments lobby more often benefit from larger subsidies and US government contracts. Finally, we study benefits and costs accruing to legislators and show (5) monetary and electoral benefits, but no evidence that US legislators are punished by their constituents because they meet with representatives of foreign countries.

Keywords: Political economy, public finance, political connections, subsidies, foreign lobbying

JEL Classification: D72, H25, P16