Electoral Politics and the Allocation of Government Capital

We study the role of electoral politics in government small business lending, employment, and business formation. We construct novel measures of electoral importance capturing swing and base voters using data from Facebook ad spending, independent political expenditures, the Cook Political Report, and campaign contributions. We find that businesses in electorally important states, districts, and sectors receive more loans following the onset of the COVID-19 crisis, controlling for funding demand and both health and economic conditions. Estimates from survey and observational data show that government funding weakens the adverse effects of the crisis on employment, small business activity, and business applications.

• Publication year

  2020

• Venue

  Social Science Research Network

• Publication date

  2020-10-09

• Fields of study

  Business, Political Science

• Identifiers
  DOI 10.2139/ssrn.3708462
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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