Out-Of-State Donors and Legislative Surrogacy in the U.S. Senate

Abstract

Studies show that the extraordinary growth in campaign expenditures is fueled by a small, elite subset of the donor population that gives generously to candidates across the country. It is often assumed that the wealthy influence policy outcomes through such gifts to politicians; however, the representational benefits of giving to politicians out-of-state are unclear. What do donors gain legislatively when they give to legislators living out-of-state? I study the campaign financing of US senators over three decades (1989–2018) and find that senators receive the most money from out-of-state donors when they face reelection and risk losing. In this context, donors invest in the collective benefits of party representation when they give money to out-of-state senators. However, when giving to senators “off cycle,” out-of-state donors behave as “consumers” who reward senators for the positions they have taken. Each bill sponsored by a senator when they are not up for reelection leads to a corresponding increase of about 1% in receipts from out-of-state donors. These results offer a more complete view of the legislative surrogacy that the wealthy receive when they give to politicians out-of-state and suggest possible links between campaign contributions and public policy outcomes.