I have been thinking lately about how the ideological distributions of individual contributors within certain industries might help illuminate the polarized state of U.S. politics. There are two types of distributions that could implicate an industry in abetting polarization. The first distribution is what political scientists would think of as typical of polarization, a bimodal distribution in which individual cluster at each extreme but very few locate in the center. The second is a unimodal distribution located at either extreme. Both distributions are characterized by a preference for extreme candidates over moderates, but the former indicates that members are ideologically divided while the later indicates that most members have similar ideological positions. This distinction is interesting because there is good reason to suspect that the ideologically aligned industries interact with the political system differently than their ideologically divided counterparts.
Industries Aligned with the Left (2008)
Industries Aligned with the Right (2008)
The figures above display the ideological distributions of industries that I refer to as ideologically aligned—that is, composed of members that are ideologically extreme but skew overwhelmingly to the left or right. Living up to frequent accusations by right-wing commentators, the unholy trio of Hollywood, the print media, and academia do indeed appear to be overrun by liberals, with lawyers and online computer services (e.g. Google) not far behind. On the other end of the spectrum, members of the oil and gas, construction, insurance, agricultural and automotive industries are overwhelmingly conservative. Although the ideological orientation of these industries is not much of a surprise, the extent to which these industries favor the extreme, rather than moderate, wings of each party far surpassed my expectations. Some of the distributions more closely resemble what I would expect from occupations that were subject to the spoils system–for instance, US postmasters prior to the Pendleton Act–than major contemporary industries with no official partisan ties.
Granted, ideologically aligned occupations are not the norm. Most industries have enough members on each side of the spectrum to be distinctly bimodal. Some of these industries have distributions that lean heavily in one direction or the other, while others are more balanced. Health care professionals, real estate, investment bankers, and commercial bankers, each at the center of recent political battles over government intervention and reform, are perhaps the best examples of deeply but roughly evenly divided occupations.
Ideologically Divided Industries (2008)
So what might we take away from this? Ansolabehere, De Figueriedo and Snyder (2003) have argued that the increasing proportion of campaign funds raised from individual contributors has helped safeguard our democracy by counteracting the influence of special interests and their PACs. This line of argument help push provisions in the Bipartisan Campaign Reform Act that froze the contribution limits for PACs at $5000 per election, while doubling the contribution limit for individuals to $2000 which was thereafter pegged to inflation.
The existence of ideologically aligned industries brings pause to the notion that money raised from individuals is somehow less corrupting or less influential than money raised from PACs. Insofar as candidates are able to identify those industries vital to their fundraising efforts, why would the incentives to support policy that favors growth in those industries be all that different because the money came from individuals rather than PACs?
Strangely enough, the comprehensive disclosure requirements for individual contributors may have had an effect opposite its intention. Rather than serving primarily to stymie backroom quid pro quid deals, it may have helped solved a coordination problem between legislators and aligned industries, by providing the means for those occupations to signal that enacting policy that favors their industry will fill their preferred party’s campaign coffers while only making a dent in the opposition’s coffers. This may seem less insidious than deals hashed out smoke-filled rooms, but as far as the public is concerned, the effects on policy probably are not all that different.
Ideologically aligned industries might also fan the flames of polarization by encouraging politicians to write-off entire industries as their de-facto opposition. This could manifest itself in mostly harmless ways. For example Senator McCain can get away with dusting off his favorite (and only?) lawyer joke on late night talk shows and stump speeches, while a cash-strapped Democratic presidential hopeful would be better advised to stump against corn subsidies on public health grounds than deride lawyers or other professionals.
Nevertheless, it could also rear its ugly head in policy disputes. Consider the ongoing fight over healthcare. Tort reform is one of the few clear opportunities for bipartisanship. Despite Republicans having oversold tort reform as a solution to keeping health care down costs, such reform would have at least had a marginal effect on costs and would have made the health reform bill much more attractive to the medical industry. (One recent survey found 92 percent of doctors in favor of malpractice reform, while 85 percent reported that the threat of malpractice lawsuits has prevented them from practicing medicine properly—it was commissioned by Jackson Health Care Services, so I would take the results with a grain of salt. A more direct estimate of the potential savings from health care tort reform can be found in the NYT’s Economix blog.) Yet Democratic lawmakers have continually dismissed tort reform with the flimsy explanation that medical malpractice is not a big deal because it only constitutes about 2-3 percent of medical costs. This is despite the notion that tort reform seems to be a natural complement to the White House’s early proposals to eliminate waste by freeing doctors to perform tests only when they deem them medically necessary rather resorting to “defensive medicine” to minimize legal liability.
One question to ponder is whether ideologically aligned industries have contributed more to the pattern of polarization than ideologically divided industries. My initial thought on the matter is that ideologically aligned industries have help blaze a path for congressional polarization by supporting extreme candidates while other industries merely responded to the increasingly polarized candidate pool. Once I have a scaling that includes a time-trend of all election cycles going back to 1980, it should be possible to track how the ideological distributions industries have changed over time and examine whether some industries acted as a catalyst to polarization while others merely adjusted to it.
There has been much talk as of late about what has caused politics in this country to become so polarized. The political science literature usually points to changes in procedural rules, regional sorting, a rise in economic inequality, extremism of party activists, and to a lesser extent, redistricting to explain the rise in polarization. However, the word on the street seems to be that Congress polarized because members from opposing parties no longer invite each other over to dinner. At least that is what Evan Bayh—the soon to be former senator from Indiana, who is also a son of a senator with the uncommon experience of taking up their fathers’ profession—had to say about it in an op-ed published in the NYT on Sunday. We political scientists tend to chalk up this account as something akin to pop-psychology, but given the level of genuine animosity apparent in Congress it is hard to see how it has not taken a toll, even if we lack sound methods to measure it.
One way to get a rough gauge of how the decline in bipartisan manners may have contributed to polarization is to look at how periods marked by bitter partisan disputes affected voting behavior of the parties. In order to get a measure of this, I use estimates from a roll call scaling method described here that uses kernel methods to smooth legislator trends over time. This makes it possible to track how polarization changes from one day to the next, in contrast to DW-NOMINATE, the only widely used estimation technique that allows for inter-temporal movement of ideal points, which only recovers a single estimate for each two-year Congress.
The figure above shows that day-by-day polarization trend closely tracks the corresponding DW-NOMINATE trend. Both trends tell a similar story in the long run: polarization reaches a low-point around the 90th Senate (1967-1968) and steadily increases in the following decades. At the same time, the day-by-day trend reveals that political polarization varies considerably between elections.
The next figure magnifies the polarization trend for the period between the 103rd and 109th Senates so that it is possible to view how Senate polarization responds to political events. There are three notable events that affect the polarization trend. The first event occurs during the 104th Congress and corresponds perfectly with the federal government shutdowns that resulted after the Republican controlled Congress failed to pass a budget bill. The second event is Senator Jeffords’ decision to switch parties during the 107th Senate, which was followed by a sharp decline in polarization. The third notable event is the rapid rise in polarization during the run up to and through the early months of the Iraq War. In December 2003, this trend abruptly ceases and then falls, corresponding with the capture of Saddam Hussein.
Some of the events seem to have lasting influence. This is best exemplified by the jump in polarization corresponding with the 1995 government shutdown. Rather than observing a spike in polarization that quickly returns to its previous level, the trend remains at its heightened level, perhaps, as Senator Bayh has suggested, as a result of increased animosity that weakened bipartisan goodwill.
Interestingly, despite my initial expectation that Clinton impeachment trial had increased polarization, in his op-ed Senator Bayh points to the impeachment trial as the one of the two instances (the other being September 11th) where all senators gathered for something other than purely ceremonial occasions and as a highlight of bipartisanship during his twelve years in the Senate:
All of us gathered in the Old Senate Chamber. For several hours we debated how to proceed. Finally, Ted Kennedy and Phil Gramm, ideological opposites, were given the task of forging a compromise. They did, and it was unanimously ratified.
This might offer some context as to why the polarization trend is in decline during that period. It also paints the somewhat paradoxical picture where a Senator best known for his consistently liberal voting record was also one of the most potent de-polarizing forces in the Senate. Although there is no way to know, something tells me that had Ted Kennedy not passed away last summer there would be much less talk at the moment about reforming the filibuster.
Regardless of one’s beliefs about how the 2008 Presidential Election ranks among other historic elections, it was certainly the most active and actively watched money race in the nation’s history. The $1.75 billion raised by presidential hopefuls from both parties more than doubled the amount raised during the 2004 Presidential Election. The surge of candidates declaring their intentions to run within months of the 2006 Midterm elections and the storied showdown between the Obama and Clinton campaigns for the Democratic nomination led to a primary season that started earlier and ended later than any in recent memory. All of this provided a seemingly endless stream of contribution data that, among other things, is ideal for tracking the ideological progression of the candidates over the course of the election. The figure below combines the IMWA with smoothing techniques to get an idea of how the election progressed.
Ideological Progression of Candidates during the 2008 Presidential Election: The presidential candidate trends are estimated in a two-step process. This first step recovered ideological estimates from an IMWA scaling that included all contributions from the 3125 PACs and 131,000 individuals that gave to two or more federal campaigns during the 2007-2008 Election Cycle. Holding the contributors estimates static, the presidential candidate trends are then smoothed over time using locally-weighted regression (LOESS) with a span of .3.
Although the plot largely speaks for itself, there were a few features that caught my attention. The first is that, with the exception of Biden and Richardson, the Democratic candidates generally maintain a consistent rank ordering, whereas the ordering of the Republican candidates is much more chaotic. The second point of interest is the Obama campaign’s move to the center during the run-up to the general election. I would venture to guess that this was this was the combined effect of Sarah Palin’s VP nomination and the financial meltdown, but that is just speculation.
The FEC requires any individual that makes a contribution of $250 or more to a PAC or candidate to disclose his or her occupation and employer. This bit of information is probably the easiest to leave blank or just intentionally ambiguous—for instance, writing down ambiguous job titles such as ‘self-employed,’ ‘businessman, or ‘internet warrior.’ Regardless, the disclosure rate for occupations generally hovers around 90 percent.
Combined with the procedure described the previous post, this allows for interesting comparisons of ideological giving patterns across industries/professions.As a first cut, I recovered ideal point estimates for the 3125 PACs and 131,000 individual contributors that gave to two or more unique candidates during the 2007-2008 election cycle and scaled them using the IMWA procedure. The figure below ranks a subset of occupations from left to right based on the mean ideal point of the members of each occupation. As a point of reference, the occupation ideal points are imposed over the density plots for all Democratic and Republican candidates.
Update: Improved versions of the graph that include all repeat contributors during the 1990-2008 election cycles are posted here.
Partisan giving rates have long been the standard measure of contributor ideology. Measured simply as the percentage of funds a contributor gives to Republicans/Democrats, the partisan giving rate is a straightforward, easy to understand and generally useful measure of contributor ideology. Although it is a great place to start, it is a far rougher approximation of ideology than most people realize.
In their book Polarized America, McCarty, Poole and Rosenthal (MPR) introduce a method of recovering the ideology of contributors that does away with the partisan assumption without introducing a handful of more complex assumptions in its place. Rather than assume all members of each party shared a single point in ideological space, they used as starting points the ideological scores of each Congress member, as reveal from Congressional voting records via their DW-NOMINATE method. This relaxes the assumption that Tom Coburn and Olympia Snowe are ideologically indistinguishable—the same being true for Dennis Kucinich and Ben Nelson, for that matter. By first ordering Congress members along the liberal/moderate/conservative spectrum, MPR can then look at the contribution profiles of each contributor and construct an ideological score based on money-weighted averages of the recipients’ ideology. For example, if a contributor gave $1000, $500, and $1500 to three Democratic candidates with the respective ideal points of -0.5, -0.1, and -0.4, the ideal point estimate given to that contributor would be:
(-0.5*1000 + -0.1*500 + -0.4*1500)/(1000+500+1500) = -0.383.
MPR’s method of estimating the ideal points of contributors is a simple yet powerful tool. Nonetheless, its reliance on DW-NOMINATE scores limits which contributors and candidates can be included in the model as well as what we can take away from the results. Notably, it excludes contributions to unsuccessful candidates that never hold office and compile a voting record.
The Iterated Money-Weighted Averaging (IMWA) procedure takes the MPR procedure a few steps further. If we can estimate the ideological positions of contributors based on the ideology of the recipient candidates, there is no reason why we cannot simply flip the procedure on its head and recover ideological estimates of candidates based on the ideology of their financial supporters. This results in a more inclusive ideological map of campaign finance that is not reliant ideological scores of candidates recovered from voting records.
The algorithm is as follows:
1) Set the ideal points of all Republicans candidates to 1, Democrats to -1, and independents to 0.
2) Estimate contributor coordinates as a function of the money weighted averages of their contributions.
3) Estimate legislator coordinates as a function of the money weighted averages of their contributors.
4) Normalize legislators to have a mean of 0 and a standard deviation of 1.
5) Go to step 2; repeat until convergence.
To illustrate, I include results from a scaling of the 2008 Election cycle that uses data from all individuals and PACs that contributed to two or more unique candidates. The figure above compare the ideological distributions of lobbyists, an important category of individual contributors, first derived from the partisan measure and then from the IMWA measure. The partisan measure lumps most lobbyists at either 0 or 1, representing the preponderance of partisans lobbyists that give exclusively to Democrats or exclusively to Republicans.
The IMWA estimates provide a much more fleshed-out portrayal that should lead to more informed inferences. For example, while lobbyists are clearly polarized, the IMWA distribution reveals that lobbyists are not as polarized as the partisan measure suggests. In fact, lobbyists are one of the least polarized industries. It also appears to be the case that liberal lobbyists are more dispersed than their conservative counterparts on K Street. In other words, the IWMA estimates are better able to account for something that is painfully obvious to anyone who follows politics, that ideology is not uniform across members of the same party or their supporters and that it is possible for one party to be more dispersed than the other.
The “no frills” IMWA method is not the only way to construct an ideological map of campaign finance. There are plenty of alternative approaches, most some slight variation on correspondence analysis, although more sophisticated statistical methods exist as well. The take-away is that no matter how one slices it, campaign finance data is rich in ideological content waiting to be unlocked and explored.