Under fundraising rules following the Citizens United v. FEC
Supreme Court, funding needs for politicians are so great that a member of
congress is expected to raise at least $18,000 per day, every day of the year.
For new members, that can mean as much as 30 hours per week on fundraising
calls, an amazing use of time for members of a legislative body that is
supposed to deliberate to govern and make laws. Equally important, many of those
calls have to be to firms, who can afford higher donation amounts than
individuals. Firms also like this arrangement, naturally, because lobbying for
favors involves donations as an important tool.
So is it possible for a firm to lose touch with politicians?
Mary-Hunter McDonnell and Timothy Werner has a forthcoming article in Administrative Science Quarterly showing that this can happen. The idea is
simple, but powerful. Politicians are stuck between those who fund their
reelection and those who actually vote. Often voters don’t pay close attention
to the funding, so politicians can take money from a broad range of firms, but
social movements can single out firms for attention. This does not mean that
voters will also notice whether these firms have political connections, but
politicians cannot take the risk that they will notice – so they stay away from
the firms that get singled out.
How do we know? It is actually quite easy to see how well
connected a firm is politically. It can donate money (but politicians can
return the donation), it can be invited to testify to congress, and it can
simply get contracts to do work for the government. All of these connections
get weaker if social movements target firms for boycott actions, they showed.
And even more importantly, the research found that the weakening of connections
was especially pronounced if the social movement issue had much voter
attention, or if the firm was well known to begin with. This makes sense
because the risk that voters will notice is especially high if either the firm
or the issue is well known.
What does this mean for firms, and for society? Well, for
firms the lesson seems clear – they need to avoid the attention of social
movements in order to keep the attention of politicians. Not a very ethical
implication, but a clear one. And for society? Well, it may seem nice that
social movements can isolate firms from politicians through boycotts, but is it
really? The main reason it is possible is that other firms are happy to pick up
the slack through lobbying more when some firms are isolated. And those firms are not necessarily
better. We live in a world of B2C (business to consumer) and B2B (business to
business) commerce, where B2B is much bigger and less exposed to boycotts.
If there is a boycott of Victoria’s Secret (which has happened) and defense
contractor Lockheed Martin picks up the slack, do we have a better society?