NCPA - National Center for Policy Analysis

Businesses and Interest Groups Give Little to Political Campaigns

September 19, 2002

Industries spend much more on lobbying than they do on political campaigns. According to a new study in the Journal of Economic Perspectives, around 80 percent of campaign contributions are from individuals. Businesses contribute so little because they receive very little for their money -- so contributing more is fruitless.

  • Individuals, organizations and companies gave a total of nearly $3 billion to national campaigns in 1999 and 2000 -- equivalent to 0.15 percent of annual federal spending.
  • Contributions by individuals average around $115.
  • Forty percent of all Fortune 500 companies do not even have a political action committee -- and the average corporate PAC gives only about $1,400 to legislators, far below the legal limit.
  • Organizations spend 10 times as much on lobbying as on direct campaign contributions.

The study challenges the common wisdom that corporate money runs politics. It finds that politicians' votes depend almost entirely on their beliefs and the preferences of their voters and their party.

Contributions can help a company's or and industry's lobbyists gain access to legislators. The lobbyists can then make their arguments -- and they often can then provide the politician with essential information.

Source: Alan B. Krueger (Princeton University), "Economic Scene: Lobbying by Businesses Overwhelms their Campaign Contributions," New York Times, September 19, 2002.


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