The Politics of the Paycheck Protection Program

Deniz Igan, Thomas Lambert, Eden Quxian Zhang and Prachi Mishra

No 16842, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Does partisanship influence loan allocation through the Paycheck Protection Program (PPP)? We examine the 2020 Presidential campaign contributions by lenders’ employees as a measure of partisanship and leverage the staggered rollout of the PPP under two different administrations to address this question. We find that partisan misalignment increases bank lending, particularly to small and first-time PPP borrowers, and those in Republican areas. This is consistent with Republican-leaning banks viewing the PPP’s 2021 phase as a legacy policy of the prior administration. Using county-level weekly unemployment insurance data, we also show that partisan misalignment is associated with higher PPP payroll coverage for small businesses. Our findings shed new light on the partisan-alignment phenomenon in finance.

Keywords: Covid-19; Ideology; Lobbying (search for similar items in EconPapers)
JEL-codes: D72 G21 G28 G32 G38 H12 H81 (search for similar items in EconPapers)
Date: 2021-12
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16842 (application/pdf)

Related works:
Journal Article: The Politics of the Paycheck Protection Program (2025)
Working Paper: The Politics of the Paycheck Protection Program (2024)
Working Paper: The Politics of the Paycheck Protection Program (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:16842

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16842

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().