by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The wave of corporations cutting their political giving in the wake of the Capitol riot is intended to punish Republicans for backing the president’s reckless election challenge, but a surprising body of academic research suggests the corporations’ actions could unintentionally fan the flames of extremism.
Dozens of corporations have ended contributions to House and Senate Republicans who backed Donald Trump’s attempt to overturn the election in Congress, while others have paused giving altogether, citing the violence in the Capitol. But their withdrawal may leave an unexpected vacuum: Research indicates that corporations exert a depolarizing effect on politics, while their absence allows more extreme individual donors to exercise greater influence. …
… [C]orporate contributions are more like long-term investments, focused on building a relationship that eventually nets a favor or two. This approach, called “access-oriented” giving, explains why corporations are big backers of incumbents, whose financial advantage is driven largely by non-ideological groups seeking access. It also explains why corporations don’t care about party: When legislators switch parties, their individual receipts change dramatically, but their corporate receipts don’t. In both cases, what matters is preserving a relationship over the long run.
In part because of this, corporations also tend to prefer giving to moderates, whose institutional durability and flexible views make them well-suited for access (consider Joe Biden’s close relationship with credit card companies). …
… Corporate political giving, therefore, tends to have an overall moderating effect on the composition of legislatures. This is because corporate giving tends to power moderates to victory, but also because reducing corporate giving increases the relative financial influence of more extreme individuals over politicians, in turn pushing them to be more extreme over time.