Foreign Influence in US Politics

85 Pages Posted: 23 Mar 2022 Last revised: 2 Nov 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: November 1, 2022

Abstract

We provide novel insights on the nature and scope of foreign lobbying and influence in US politics. To do so, we introduce a comprehensive dataset of date-stamped meetings between foreign agents and individual US legislators, spanning 2000 to 2018 and covering 146 countries and 1,200 legislators. From this new dataset, five facts emerge: (1) improvements in diplomatic relations with the US are associated with fewer meetings; (2) meetings are positively related to legislator lawmaking effectiveness and past employment connections with lobbyists while they are unrelated to political ideology; (3) foreign agents maintain connections with all legislators even after they depart from committees that are important to foreign countries; (4) around these meetings, foreign countries benefit from increased financial aid and assistance, and advantageous product tariffs; and (5) meetings between representatives of a given foreign country and US legislators are associated to changes in the ethnic composition of registered voters and an increase in privately-sponsored foreign trips to these countries. Overall, these results provide the first large-sample evidence of foreign influence in US politics and present new observations to guide work in economics, public finance, and political science.

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 (November 1, 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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