Is There a Market for Peerages? Can Donations Buy You a British Peerage? A Study in the Link Between Party Political Funding and Peerage Nominations, 2005-14

Andrew Mell, Simon Radford and Seth Alexander Thevoz

No 744, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Trust in political institutions has declined across developed democracies. One of the main reasons cited for this lack of trust in public opinion polls has been the role of money in politics. The Supreme Court decisions in Citizens United and McCutcheon, amongst others, have increased the political salience of potential campaign finance reforms, and the Great Recession has reinvigorated a public debate on regulatory capture by Wall Street. So too scholars have taken up the topic with renewed vigor. Political scientists have tried to tackle the issue in two main steps: firstly, by showing that money can buy access to legislators; and secondly, that legislators are thereby more responsive to the wishes of donors when writing and voting on laws. Researchers have used experiments and other techniques to show that Congressional staffs are more responsive to requests from donors compared to others, and have also shown aggregate trends in responsiveness to the preferences of the wealthier.In this paper we try and go one step further: to show that donors can become legislators. We do this by looking at a novel example: the United Kingdom's appointed Second Chamber, the House of Lords. Compiling an original dataset of large donations and nominations for "peerages" that allow them to take a seat in the Lords, the authors show that, when the "usual suspects" for a position, like former MPs and party workers, are accounted for, donations seem to play an outsize role in accounting for the remaining peers. Given the widespread concern at undue influence accorded to large donors, understanding the extent of how donations influence politics and evaluating proposals for democratic renewal should be a major concern of political scienes.

Keywords: Illegal Behaviour; IlIicit Trade (search for similar items in EconPapers)
JEL-codes: K42 P48 (search for similar items in EconPapers)
Date: 2015-03-20
New Economics Papers: this item is included in nep-law
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