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Congressional Committees as Reputation-building Mechanisms

Published online by Cambridge University Press:  20 January 2017

Randall S. Kroszner*
Affiliation:
University of Chicago & George Mason University
Thomas S. Stratmann
Affiliation:
University of Chicago & George Mason University
*
The University of Chicago, Graduate School of Business, Chicago, IL, USA. E-mail: randy.kroszner@gsb.uchicago.edu

Abstract

Interest groups cannot enforce contracts with legislators to work in their favor since fee-for-service agreements would be considered bribery. When such contracts are not available, a system of specialized, standing committees can provide a second-best way to maximize contributions, since such a system facilitates repeated interactions and reputational development between PACs and members of the relevant committees. Using data on PAC contributions by competing financial services interests to members of the House Banking Committee, we find evidence consistent with key implications of our model of committees as reputational-development devises. We then interpret important episodes in the evolution and development of the committee system during the twentieth century from the perspective of our theory. We focus on the revolt against House Speaker Cannon, which resulted in the birth of the modern committee system, and the post-Watergate reforms. We also consider broader implications of this approach for analyzing term limits, corruption, and party strength. JEL classifications: D72, D78, G28.

Type
Research Article
Copyright
Copyright © V.K. Aggarwal 2000 and published under exclusive license to Cambridge University Press 

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