Wealth Effects of Being a Conservative or Liberal Politician
Noni Mausa sends a link to this paper (warning: PDF!!!) by Andy Eggers and Jens Hainmueller. Here’s the abstract:
While the role of money in policymaking is a central question in political economy research, surprisingly little attention has been given to the rents politicians actually derive from politics. We use both matching and a regression discontinuity design to analyze an original dataset on the estates of recently deceased British politicians. We find that serving in Parliament roughly doubled the wealth at death of Conservative MPs but had no discernible effect on the wealth of Labour MPs. We argue that Conservative MPs profited from office in a lax regulatory environment by using their political positions to obtain outside work as directors, consultants, and lobbyists, both while in office and after retirement. Our results are consistent with anecdotal evidence on MPs’ outside Financial dealings but suggest that the magnitude of Conservatives’ financial gains from office was larger than has been appreciated.
Noni also asks whether this can be applied to American politicians.
I don’t have the data to apply it to American politicians, and I’ll confess I only had the time to skim through the paper, but my thoughts:
1. The results of the paper seem plausible to me
2. I think you would see a similar difference if you looked at congresscritters
3. I think part of the reason for the difference is that conservatives, politicians and otherwise, seem to confuse what is good for them with what is good for the country more than liberals. I imagine some of them behave that way for more, um, direct reasons.
4. My guess is that this effect isn’t simply one where the more conservative you are, the better you do. While I do feel that extreme liberals probably do worse than centrist liberals, and centrist liberals do worse than centrist conservatives, I imagine the far right doesn’t do as well as centrist conservatives.
Anyway, your thoughts about the study, what it may mean here in the US, and how to go about testing it?