Demanding Information: Think Tanks and the US Congress

The recent growth in the formation of think tanks in the United States raises questions about their role in the democratic process. A theory of think-tank formation is presented here, which posits that committee debate creates incentives for legislators to seek research-based, policy-analytic information supporting competing policy positions. As political entrepreneurs recognize this demand, they supply think tanks, just as scholars have suggested they supply interest groups. An important macro-level implication of this theory is that as legislators' ideological polarization increases, the demand for policy analysis increases, as does the number of think tanks supplied. Empirical support for this proposition in the United States from 1903 to 2003 is shown, while controlling for market factors measuring the opportunity cost of investing in think tanks.