THE DETERMINANTS OF INDUSTRY POLITICAL ACTIVITY, 1978-1986

While the allocation of interest group monies to specific politicians has been extensively studied, little is known about the factors that determine of the overall level of political activity across groups. We study total contributions by corporate political action committees at the industry level. We create a large data set on industry political activity, covering 124 industries across five election cycles from 1978 to 1986 and sketch out a simple benefit-cost model to predict total corporate PAC contributions in each industry. The few previous studies of this phenomenon use relatively small samples and employ statistical techniques that are either biased or impose untested restrictions. The selectivity-corrected regression technique used here solves these problems. We find that industries with greater potential benefits from government assistance contribute systematically more but that the ability to realize these benefits is constrained by collective action problems facing firms in each industry.