Peer-Reviewed Publication

Li, Zhao. 2018. "How Internal Constraints Shape Interest Group Activities: Evidence from Access-Seeking PACs." American Political Science Review 112(4):792--808.

Abstract. Interest groups contribute much less to campaigns than legally allowed. Consequently, prevailing theories infer these contributions must yield minimal returns. I argue constraints on PAC fundraising may also explain why interest groups give little. I illuminate one such constraint: access-seeking PACs rely on voluntary donations from affiliated individuals (e.g., employees), and these PACs alienate donors with partisan preferences when giving to the opposite party. First, difference-in-differences analysis of real giving shows donors withhold donations to access-seeking PACs when PACs contribute to out-partisan politicians. Next, an original survey of corporate PAC donors demonstrates they know how their PACs allocate contributions across parties, and replicates the observational study in an experiment. Donors' partisanship thus limits access-seeking PACs' fundraising and influence. This provides a new perspective on why there is little interest group money in elections, and has broad implications for how partisan preferences and other internal constraints shape interest group strategy.

Invited Contributions

Li, Zhao. 2019. "Looking Inside the Black Box of Firms: A Proposal for A Research Agenda." The Political Economist 15(2): 17-19.

Li, Zhao. 2021. "Analyzing the Evidence: Who's Funding Google's PAC?" in American Politics: Power and Purpose, 16th edition, Theodore J. Lowi, Benjamin Ginsburg, Ken Shepsle, and Stephen Ansolabehere. New York: W.W. Norton.

Li, Zhao. 2021. Review of Game Changer: How Dark Money and Super PACs Are Transforming U.S. Campaigns, Henrik M. Schatzinger and Steven E. Martin, Political Science Quarterly 1136(3): 580–581.

Selected Working Papers

Can Stakeholders Mobilize Businesses for the Protection of Democracy? Evidence from the U.S. Capitol Insurrection (with Richard DiSalvo; forthcoming in the American Political Science Review)

Abstract. An unprecedented number of major U.S. companies announced changes to their campaign contributions following the Capitol insurrection on January 6th, 2021. We analyze the role of corporate stakeholders in these announcements as well as their implications for democratic institutions and business-government relations. Mirroring polarized public reactions to the Capitol insurrection, companies with more Democratic-leaning stakeholders (e.g., executives, employees, consumers) were more likely to publicly refuse contributing to Republican legislators who objected to the electoral college results. Moreover, these corporate pledges held up in available 2021 campaign finance records, implying potentially significant fundraising losses for said Republican legislators. Given increasing polarization and heightened expectations of the civic responsibility of businesses, the partisanship of corporate stakeholders may prove important in mobilizing businesses to protect democratic institutions (e.g., advocacy against voter restriction bills). However, such stakeholder pressure may also weaken businesses' bipartisan legislative coalitions and compel corporate influence-seeking activities to go dark.

When Do Campaign Donors Reject Extremists? Evidence from the U.S. Foreclosure Crisis (conditionally accepted by the Journal of Politics)

Abstract. Individual campaign donors offer reliable support for extremists in U.S. politics. Can such support waiver during economic crises, which often bolster extremists' popular appeals? Linking nationwide campaign finance and real estate transactions, I examine how the foreclosure crisis affected Republican donors’ willingness to donate to Tea Party candidates, an insurgent right-wing faction of the Republican party that opposed foreclosure relief. Individual-level longitudinal analyses demonstrate that Republican donors in distressed neighborhoods became less likely to contribute to Tea Party candidates, but continued to give to other, more mainstream, Republican candidates. The Tea Party movement's unsympathetic portrayal of underwater homeowners likely alienated Republican donors who witnessed neighbors of the same race as themselves suffering the plight of foreclosures. Despite the resulting fundraising losses, Tea Party candidates performed better in primary elections in crisis-stricken districts. These findings challenge long-standing claims about how the U.S. campaign finance system fuels polarization and extremism.

Economic Geography and Special Interest Entrenchment: Evidence from the Shale Boom and State Campaign Finance (with Richard DiSalvo)

Abstract. Business entry into communities may stimulate local economies, but its negative externalities—including environmental degradation—can generate backlash. To understand how firms use campaign contributions to preempt opposition to their expansion, we study the fracking boom as a natural experiment that transformed the geography of drilling activities across the U.S. Through panel analysis and an instrumental variable design, we show that state legislative districts where drilling expanded due to the fracking boom saw a surge in oil and gas drilling-related campaign contributions. While this effect was primarily driven by in-district drilling firms, out-of-district, same-state firms also contributed to the overall rise in money. Finally, the influx of contributions into fracking districts disproportionately benefited Republican candidates in historically Democratic districts, even relative to the industry’s high baseline support for Republicans. These findings illuminate the roles of business geography in corporate political strategy, energy and environmental policymaking, and democratic representation.

Inferring Candidates’ Issue-Specific Positions from Itemized Campaign Contributions Using Supervised Machine Learning (with Adam Bonica)

Abstract. The Supreme Court upholds mandatory disclosure of itemized contributions as an important means to help voters place candidates on the political spectrum “more precisely than is often possible solely on the basis of party labels and campaign speeches” (Buckley v. Valeo). To assess the informational value of disclosure for democratic accountability, we apply supervised machine learning to predict candidates' issue-specific positions based on itemized contributions they received prior to entering Congress. Our models accurately distinguish candidates on different issues both within and across parties, generally outperforming predictions based on DW-NOMINATE scores. Moreover, leveraging only non-incumbent fundraising records, our algorithms can impute issue scores for candidates lacking office-holding experiences. We also identify donors that provide the most marginal information on candidates' policy stances. Itemized contributions can facilitate voters' discernment of candidates on issues of interest, and are uniquely valuable for differentiating co-partisan candidates in the absence of legislative records.

Selected Work in Progress

Lemons in the Political Marketplace: A Big-Data Approach to Detect ‘Scam PACs’ (email for current draft)

Abstract. ‘Scam PACs’ are political action committees (PACs) in the United States that raise campaign contributions to enrich their creators (e.g., political consultants) instead of advancing the campaigns or causes they purport to champion. In the 2018 election cycle alone alleged scam PACs collectively raised more than $106 million, which could have fully funded 140 average House campaigns. Scam PACs’ proliferation and lack of regulatory oversight not only undermine PACs’ accountability to donors, but also generate a lemons problem in the political marketplace. To reduce the information asymmetry that donors face in discerning scam PACs, I first examine how scam PACs that have been identified by media reports differ from comparable legitimate PACs on aggregate attributes related to their solicitation strategies, fundraising and expenditure patterns, regulatory compliance, donor characteristics, and PAC donor and personnel networks. Building on these descriptive analyses, I construct a supervised machine learning algorithm that systematically detects scam PACs in U.S. federal elections.

Media and Ideological Movements: How Fox News Built the Tea Party (with Greg Martin; email for current draft)

Abstract. Does media influence operate primarily on low-information swing voters, or can it also affect the party activists who shape ideological factions? We examine the role of Fox News in the rise of the Tea Party movement within the Republican party since 2009. We use differences in Fox News’ cable channel positions across cable systems to isolate exogenous variation in exposure to the channel (Martin and Yurukoglu, 2017). Earlier in the 2009-10 election cycle, Fox News did not boost Tea Party rally sizes or encourage strategic entry by Tea Party candidates, consistent with content analysis demonstrating a lack of pro-Tea Party slant in Fox News until 2010. However, exposure to Fox News significantly increased campaign fundraising and vote shares in primary elections for Tea Party-backed Republican candidates relative to other Republican candidates. The Tea Party movement benefited from an advantage – rare among insurgent movements – in the backing of a powerful media outlet, which enabled it to rapidly move from the fringe to the center of the Republican party.

Keep Winning with WinRed? Digital Fundraising Platform as the Party’s Public Good (with Seo-young Silvia Kim; email for current draft)

Abstract. We argue that WinRed, the newly emergent online campaign fundraising platform of the Republican Party, is evidence of parties as endogenous institutions (Aldrich, 2011) actively evolving to help its members achieve their ambitions. We show that given historical contexts of coordination failures and higher fundraising pressures, the Republican Party implemented a top-down centralization in 2019 to enforce member contributions to a “public good,” i.e., coordinating on a single platform. After analyzing the party’s theoretical motivations, we investigate the characteristics that explain which congressional candidates in the 2020 general election complied with the party’s efforts. Finally, we examine whether joining the plat- form was beneficial to individual candidates in fundraising outcomes using a matching ap- proach. Although superior fundraisers did self-select into WinRed, joining the centralized platform had short-term benefits, especially for non-incumbents and House candidates, and more small-dollar donations. We discuss the implications of this new centralized structure of the party.