The Returns from Rent-Seeking: Campaign Contributions, Firm Subsidies, and the Byrd Amendment

Benjamin H. Liebman and Kara M. Olson
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Kara M. Olson: American University
Authors registered in the RePEc Author Service: Kara Marie Reynolds ()

International Trade from EconWPA

Abstract: This paper examines Congressional support of the Byrd Amendment, a new antidumping law that directs the U.S. Customs Service to distribute collected duties to protected firms. A critical feature of the Byrd Amendment is that it produces a highly transparent measure of how much each firm is rewarded for its rent-seeking efforts to secure the bill’s passage, specifically the dollar value its Byrd disbursement. Therefore, this policy provides researchers with a unique setting in which to study the link between campaign contributions, Congressional behavior, and the subsequent financial returns to firms. Our empirical results show that campaign contributions from potential beneficiaries increased the likelihood that lawmakers would sponsor the Byrd Amendment. We also show that political contributions from the law’s beneficiaries increased with the rewards that they expected to receive, although not by as much as predicted by some political economy models of trade policy.

Keywords: Byrd Amendment; Antidumping; Campaign Contributions; Political Economy of Trade Policy (search for similar items in EconPapers)
JEL-codes: D72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-pol and nep-reg
Date: 2004-08-16
Note: Type of Document - pdf; pages: 17
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Related works:
Journal Article: The returns from rent-seeking: campaign contributions, firm subsidies and the Byrd Amendment (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpit:0408003

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