Portal Red Investigadores de Economía

We employ a regression discontinuity design (RDD) based on close elections to estimate the rents from a seat in the U.S. Congress between 1850 and 1880. Using census data, we compare wealth accumulation among those who won or lost their first race by a small margin. We find evidence of significant returns for the first half of the 1860s, during the Civil War, but not for other periods. Those who won their first election by a narrow margin and served during the period 1861–1866 accumulated, on average, almost 40% more wealth between 1860 and 1870 (roughly $800,000 in present-day values) relative to those who ran but did not serve. We also find that wealth accumulation was particularly large for congressmen who represented states most involved in military contracting and those who served during the Civil War in committees that were responsible for most military appropriations. We hypothesize that increased opportunities from the sudden spike in government spending during the war and the decrease in control by the media might have made it easier for incumbent congressmen to collect rents.

The Control of Politicians in Normal Times and Times of Crisis: Wealth Accumulation by U.S. Congressmen, 1850–1880