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Money and Politics

We all know money in politics is disturbing. And about the safest forecast I can make is this: The candidates for the White House will raise record sums for the 2008 election.

But I was going through some research papers I had put aside yars ago, and came on one by political scientist Stephen Ansolabehre of MIT, management professor of John de Figueirdo of MIT, and James M. Synder, Jr. of MIT They ask: "Why Is There So Little Money in U.S. Politics?"

It's intriguing. Yes, candidates, parties, and organizations spent a record $2 billion in the 2000 Presidential contest. (I'm taking the numbers from the paper.) Yet total government spending in 2000 was $2 trillion. And the Presidency is the most powerful job in the world. Breaking down the numbers, the value of affecting government policy is high. For instance, in agriculture, dairy producers gave $1.3 million and got price supports worth almost $1 billion in the 2002 Farm Bill. That is an incredible return on investment. You can come up with comparable figures in many industries.

Yet individuals and firms give far more to charity than politics. For instance, 15 large corporations in 1998 gave $1.6 billion to charity and only $16 million to political campaigns.

So, to put a different twist on the normal question: What accounts for the lack of money in politics? The scholars run through a number of theories, but they favor a "consumption" model. "Campaign contributing is a form of consumption, or, in the language of politics, participation," say the authors. It's like giving to charity, or public radio. And the single strongest predictor of contributing is income growth--and we are a much wealthier nation.

Or maybe it's easier to buy a vote than we think?

About the author

Chris Farrell is the economics editor of Marketplace Money.
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I think it's good that more is spent on charity than politics.

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