Foreign Influence in US Politics

79 Pages Posted: 23 Mar 2022 Last revised: 26 Sep 2023

See all articles by Marco Grotteria

Marco Grotteria

London Business School; Centre for Economic Policy Research (CEPR)

Max Miller

Harvard Business School, Finance Unit

S Lakshmi Naaraayanan

London Business School

Date Written: September 25, 2023

Abstract

This paper documents that foreign lobbying influences US government spending. We introduce a comprehensive dataset of over 230,000 date-stamped, in-person meetings between agents representing foreign governments and individual US legislators, state governors, and employees of US executive agencies from 2000 to 2018. The data suggest that foreign agents meet disproportionately with individuals important for foreign aid and corporate subsidies, like legislators sitting on powerful congressional committees. Foreign agents also maintain connections with legislators even after they depart powerful committees, providing evidence that meetings do not just reflect short-term quid-pro-quo arrangements. Around meetings, foreign countries receive greater amounts of financial aid. Foreign firms whose governments lobby more often also receive larger corporate subsidies from areas the legislators and governors that they meet with represent. Finally, legislators who meet more often with foreign agents receive both monetary and electoral benefits, while we do not find changes in the political contributions they receive or in their probability of re-election, suggesting that legislators are not punished by their constituents for meeting with representatives of foreign countries.

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

JEL Classification: D72, H25, P16

Suggested Citation

Grotteria, Marco and Miller, Max and Naaraayanan, S Lakshmi, Foreign Influence in US Politics (September 25, 2023). Jacobs Levy Equity Management Center for Quantitative Financial Research Paper, Available at SSRN: https://ssrn.com/abstract=4058658 or http://dx.doi.org/10.2139/ssrn.4058658

Marco Grotteria

London Business School ( email )

Sussex Place
Regent's Park
London NW1 4SA
United Kingdom

HOME PAGE: http://sites.google.com/site/marcogrotteria/home

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Max Miller (Contact Author)

Harvard Business School, Finance Unit ( email )

25 Harvard Way
355
Boston, MA 02163
United States

HOME PAGE: http://www.max-miller.finance

S Lakshmi Naaraayanan

London Business School ( email )

Sussex Place
Regent's Park
London NW1 4SA
United Kingdom

HOME PAGE: http://www.lakshmin.com

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