Abstract

This article explores how earmarks shape the ideological composition of elected officials in Congress. Relative to the classic median voter theorem, the framework developed here introduces multiple legislative districts and incorporates a desire for local earmarks in the specification of voter preferences. The main theoretical result demonstrates that competition among politicians to "bring home the bacon" substantially reduces Congressional polarization. Data from after the earmark ban of 2011 provide supporting evidence for this mechanism.

Aaron Hedlund is an assistant professor of economics at the University of Missouri–Columbia and a visiting scholar at the Federal Reserve Bank of St. Louis. The author thanks two referees for their useful feedback. 

INTRODUCTION

Casual observation and an abundance of research reveal a trend of growing political polarization in the United States over the past few decades. To some observers, polarization impedes effective governance and poses a risk to economic performance. In support of this view, Mian, Sufi, and Trebbi (2014) provide evidence from a large sample of countries showing that, following a financial crisis, heightened ideological polarization weakens ruling coalitions and creates legislative gridlock that hampers reform efforts. In addition, Baker et al. (2014) attribute a rise in U.S. policy uncertainty to political polarization and Azzimonti (2018) links higher partisan conflict to depressed investment. By showing that causality also runs in the opposite direction, Algan et al. (2018) raise the specter of a feedback loop between poor economic performance and polarization that gets worse over time. Searching for potential causes, voices from across the political spectrum—including President Trump himself—have attributed some of the partisan rancor to the 2011 federal earmark ban that remains in place. After all, the number of bills passed into law immediately following the moratorium dropped to its lowest level in 20 years.

Ironically, there are also polarized views on the consequences and desirability of polariza­tion itself. While some lament a decline in legislative accomplishments, others praise the reduction in political horse trading and spending on "pet projects," such as the controversial $400 million "Bridge to Nowhere" in Alaska that lawmakers eventually scuttled after the ensuing public uproar. For better or worse, the earmark ban has undoubtedly removed one of the major sources of leverage Congressional leadership can use to enforce party discipline—as described in Grossman and Helpman (2005)—thus paving the way for ideology to play a greater role in the political process.

Putting aside any normative concerns, this article analyzes the link between pork-barrel spending (equivalently, earmarks)—defined as appropriations secured for the express purpose of bringing money to a legislator's local district—and Congressional polarization. Theoretically, I consider an environment with multiple districts where voters have a preference both for ideological compatibility with their elected legislator and for greater earmark spending in their district. Once elected, legislators who are closer to the ideological mean of Congress receive a greater share of pork-barrel funding, regardless of the overall distribution of voter ideologies. The median voter in each district—who is effectively in the position of kingmaker— balances ideology with the ability to "bring home the bacon" when selecting his or her preferred political candidate, taking as given what happens elsewhere. I characterize the equilibrium and show that earmarks significantly compress the ideological distribution of Congress relative to that of the population. Empirically, evidence from after the 2011 earmark ban supports these theoretical findings.

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