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Title: The Control of Politicians in Normal Times and Times of Crisis: Wealth Accumulation by U.S. Congressmen, 1850-1880

Citation Type: Miscellaneous

Publication Year: 2011

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Abstract: A central role of political institutions is to control politicians and prevent the abuse of political power for personal gain. An empirical question in this context is understanding the environments or conditions under which democratic political institutions may be less eff ective at controlling politicians behavior. In this paper we use historical census data from the U.S. to estimate the rents from holding a seat in the U.S. House of Representatives during the 1850-1880 period. We employ a regression discontinuity design (RDD) based on close elections and compare wealth accumulation in the decades between 1850 and 1880 among those who won or lost their fi rst congressional race by a small margin. Remarkably, we find no evidence of large returns to congressional seats for the 1850s, the second half of the 1860s or during the 1870s. This stands in contrast to evidence for other countries and provides suggestive evidence on the e ffectiveness of U.S. political institutions during "normal times". However, we do fi nd evidence of signifi cant returns for the first half of the 1860s, during the Civil War. Those who won their first election by a narrow margin and served during the period 1861-1866 accumulated, on average, 40% more wealth between 1860 and 1870 (approximately an additional $1,000,000 in present values) relative to those who ran but did not serve. We hypothesize that increased opportunities from the sudden spike in government spending during the war and the decrease in control from government agencies, voters andthe media might have made it easier for incumbent congressmen - and probably other politicians - to collect rents. Consistent with our hypothesis, we fi nd evidence thatwealth accumulation was particularly large for congressmen who represented states that were home to the major military contractors during the war, and for congressmen who served during the Civil War in committees that were responsible for most military appropriations. Our results can be interpreted more broadly and are suggestive that rent-seeking may be more prevalent in episodes of crisis such as natural disasters, wars or other types of political and economic turmoil. During these periods governmentexpenditure often increases substantially, increasing the amount of resources on which politicians might prey, and at the same time control and oversight by the media andother state institutions may be less eff ective than in normal times.

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Authors: Querubin, Pablo; Snyder, James M.

Publisher: MIT

Data Collections: IPUMS USA

Topics: Other

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