Stories
Stories
Congressional Pork Is Bad for Business
The passing on June 28 of Sen. Robert Byrd of West Virginia at 92, after a 51-year career in the Senate, triggered an outpouring of remembrances, positive and negative, of his long service on Capitol Hill. Serving in a variety of leadership roles, including most recently as chairman of the Appropriations Committee, Byrd was a master at bringing home the bacon for his constituents, prompting one watchdog group to denounce him as the "King of Pork." By one estimate, he steered $2.26 billion to West Virginia between 2000 and 2008. While Byrd, no doubt, viewed this as an unalloyed good, recent research by three HBS professors suggests otherwise.
The research project began with the premise that as a state's congressional delegation grows in powerful committee assignments, businesses back home benefit from the increased flow of earmarks for local projects. It turned out quite the opposite. Professors Lauren Cohen, Joshua Coval, and Christopher Malloy discovered to their surprise that increased federal spending causes local companies to lose sales and cut back on research, payroll, and other expenses. Indeed, reports HBS Working Knowledge, in the years that followed a congressman's ascendancy to the chairmanship of a powerful committee, the average firm in his state cuts back capital expenditures by roughly 15 percent, according to the trio's working paper, "Do Powerful Politicians Cause Corporate Downsizing?"
The research strongly suggests that bringing home the bacon isn't good for business, something to keep in mind next time you hear politicians promising earmark reform.
Post a Comment
Related Stories
-
- 25 Jan 2024
- HBS Clubs
Alumni Gain Insights on Nigeria’s New Government; Taipei Alumni Host Faculty Guest
By: Margie Kelley -
- 01 Jun 2023
- HBS Alumni Bulletin
Curb Appeal
Re: Jessica Tisch (MBA 2007); John D. Macomber (Senior Lecturer of Business Administration); By: Alexander Gelfand; photography by Vance Jacobs -
- 17 Aug 2022
- HBS Alumni News
To Serve and Protect the Markets
Re: Nekia Hackworth (MBA 2003); By: Margie Kelley -
- 06 Dec 2021
- HBS Alumni Bulletin
Monaco's Digital Transformation
Re: Frederic Genta (MBA 2011); By: Jennifer Gillespie
Stories Featuring
-
- 09 Mar 2021
- HBS Alumni Bulletin
Addressing Education Inequities Exacerbated by the Pandemic
Re: John Alford (MBA 2001); Stacey Childress (MBA 2000); Ashish Dhawan (MBA 1997); Joseph B. Fuller (Professor of Management Practice); Debora L. Spar (Jaime and Josefina Chua Tiampo Professor of Business Administration Senior Associate Dean, Business in Global Society Unit Head, General Management); By: Jennifer Gillespie -
- 29 Feb 2016
- HBS Alumni News
Stacey Childress: Making A Difference
Re: Stacey Childress (MBA 2000) -
- 22 Sep 2015
- Making A Difference
Redesigning Schools for Today’s Learners
Re: Stacey Childress (MBA 2000)