Why Is There So Little Money in U.S. Politics?1

1Professor Ansolabehere thanks the Carnegie Corporation for their generous ¯nancial support under the Carnegie Scholars Program. Thirty years ago, Gordon Tullock posed a provocative puzzle: considering the value of public policies at stake and the reputed in°uence of campaign contributions in policy-making, why is there so little money in U.S. politics? In this paper, we argue that campaign contributions are not a form of policy-buying, but are rather a form of political participation and consumption. We summarize the data on campaign spending, and show through our descriptive statistics and our econometric analysis that individuals, not special interests, are the main source of campaign contributions. Moreover, we demonstrate that campaign giving is a normal good, dependent upon income, and campaign contributions as a percent of GDP have not risen appreciably in over 100 years- if anything, they have probably fallen. We then show that only one in four studies from the previous literature support the popular notion that contributions buy legislators ' votes. Finally, we illustrate that when one controls for unobserved constituent and legislator e®ects, there is little relationship between money and legislator votes. Thus, the question is not why there is so little money politics, but rather why organized interests give at all. We conclude by o®ering potential answers to this question. 1