Thursday, August 5, 2010

Revealed Preference (?)

. Thursday, August 5, 2010

This post from Adam Bonica at Ideological Cartography is very interesting (and a welcome addition to the grad student poli-sci blogosphere). It shows the partisanship of some major American corporations by analyzing campaign contributions of corporate board members:

The ideological measures include information from all contributions to state and federal candidates as well as contributions to party and ballot committees. Nearly all members of major corporate boards have made political donations in some form of another. Overall, I was able to estimate positions for about 90 percent of board members from their contributions to candidates or party committees between 1992 and 2008.

These results challenge conventional beliefs about the political leanings of corporate leaders. Republicans have long been seen as the party of big business. To whatever extent this label should apply, it probably owes more to the party’s policies than the composition of its support base. Although board members from some sectors exhibit conservative allegiances—notably the oil, gas, and coal industries—most corporate boards are either dispersed across the ideological spectrum, or seem to have aligned with the left, as is the case of many of the growth stories of the new economy.

Click on the image for a larger version. Bonica uses the analysis to challenge conventional wisdom about the Citizens United legal decision that allows corporations to engage in political speech. If corporations are not overwhelmingly conservative/Republican then extending speech rights to corporations is not likely to distort the political process. (In fact, this was the take I took on Citizens United at the time, but only in conversation; I should've written it down.)

This is an interesting way to examine the American political economy, but how about IPE? One of my first thoughts after reading Bonica's post was that this sort of analysis could be used to re-examine models of trade politics. Two traditional models argue that political attitudes toward trade come from either factor endowments (e.g. capital or labor) or sectoral position (i.e. industry). The first, which derives from Stolper and Samuelson's analysis of the basic Heckscher-Ohlin trade model, argues that support for trade will come from the abundant factor of production, and opposition from the scarce factor. In this model, capital and labor generally have opposing views about trade. The second, which stems from work by Ricardo and Viner among others, claims that sectors which benefit from expanded markets will support liberalization, while those that will suffer from increased competition will favor autarky. In this model, capital and labor within the same industry will be united in supporting or opposing trade openness.

Simply looking at the graph above doesn't tell us much, since "liberal" and "conservative" doesn't describe attitudes to trade all that well. It would be more instructive to look at which candidates are getting contributions and what their public attitudes to trade are. Contributions may also reflect things other than trade politics, such as preferential tax treatment or subsidies. For instance, all the oil/gas companies line up with Republicans, which could be because they are more amenable to energy trade, but could also be because Republicans are more likely to oppose climate change legislation. It is interesting to note, however, that nearly all high-tech and skilled-service companies are more liberal than nearly all resource-related companies.

It's a small sample, and no clear explanation for these patterns jumps out at me. But it would be interesting to delve deeper into these data to see what patterns emerge.

(ht: Monkey Cage)


SBD said...

This research is a textbook example of why it is dangerous to infer preferences from outcomes within a strategic context. In order to make the case that this data indicates that Citizens United will be a boom for both Democrats and Republicans, you would have to show:
1) Donation patterns reflect true ideology rather than strategic donations.
2) Corporate donations are determined by the ways in which individual board members privately donate.

While this data is interesting (I was particularly surprised that Target board members give to more Republican causes than Wal-Mart board members), in its current state, it does not provide us with enough information to make any reasonably defensible inferences about how corporations will allocate campaign donations in the future.

Kindred Winecoff said...

the interesting thing to me would be your #1: whether these donations are reactive (i.e. intended to influence policy *after* elections) or proactive (i.e. intended to get particular candidates elected). if the former, the walmart contributions make a bit more sense.

i agree that it doesn't tell us everything, and as i said i don't really know (or care) how what this means in context of citizen's united. but it's better than just making completely baseless speculations.

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Revealed Preference (?)
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