Foreign Influence in US Politics

45 Pages Posted: 23 Mar 2022 Last revised: 31 Dec 2022

See all articles by Marco Grotteria

Marco Grotteria

London Business School

Max Miller

University of Pennsylvania, The Wharton School, Finance Department

S Lakshmi Naaraayanan

London Business School

Date Written: December 30, 2022

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

Suggested Citation

Grotteria, Marco and Miller, Max and Naaraayanan, S Lakshmi, Foreign Influence in US Politics (December 30, 2022). 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

Max Miller (Contact Author)

University of Pennsylvania, The Wharton School, Finance Department ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

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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