Commitment and the campaign contribution contract

Theory: Commitment problems make establishing long-term relationships between members of Congress and organized interests extremely difficult. Hypothesis: Political action committees whose contribution behavior is unfavorable to an election winner are not forced to pay for their mistakes in the subsequent election to get back into the representative's good graces. In other words, strong punishment strategies are not employed to enforce what we label the campaign contribution contract. Methods: Because theory suggests that campaign contributions involve decisions about whether to make a donation and how much to give, a general econometric framework allowing these two decisions to be either independent or correlated is utilized. This model subsumes both Tobit and the combination of probit and ordinary least squares estimation. A large scale data set designed to uncover any evidence that elected representatives commit themselves ex ante to punish groups for opportunistic behavior is employed. Covering 1977-86, this data set consists of roughly 115,000 campaign contribution decisions made by large corporate, labor, and trade political action committees concerning long-time members of Congress. Ancillary information is incorporated for model specification purposes. Results: The willingness of legislators to punish is marginal, suggesting that evidence for credible commitment is weak. We need to reconsider whether legislators and group leaders can possibly forge long-term relationships. Additional thought must also be given to the motivations for campaign contributions and to what a reasonable enforcement mechanism for commitment might look like.