Kosher Pork
Allan Drazen & Ethan Ilzetzki
There are two common views of pork barrel spending. One is that pork barrel spending benefits special interests at the expense of social welfare, hence antithetical to responsible policy making, especially in times of crisis. An alternative is that pork “greases the legislative wheels” making possible the enactment of socially beneficial legislation that would otherwise not pass. In this paper we reexamine both arguments and show that they depend on the nature of heterogeneity of interests and information across legislators. Under full information, but with heterogeneous ideology, policy compromise may be sufficient to pass beneficial legislation. Pork typically reduces welfare as in the conventional wisdom, but we also characterize cases where pork can indeed “grease the wheels” and improve social welfare. When agents are heterogeneous not only in their ideology, but also their information, allocation of pork may be crucial to passage of legislation appropriate to the situation. It does so not simply by inducing legislators to accept legislation they view as harmful, but also by conveying information about the necessity of policy change, where it may be impossible to convey such information in the absence of pork. Moreover, pork will be observed when the public good is most valuable precisely because it is valuable and the informed agenda setter wants to convey this information. Moreover, information may be conveyed for the reason pork is widely criticized, that is, because it benefits special interests.
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“... trading of that sort [i.e., pork to pass bills] has characterized the fight for almost every major, controversial measure of domestic legislation in the last half century ... Frederick Lawton ... who had been for decades a career official at the Office of Management and Budget (as it now is called), once told me of a summons to Franklin Roosevelt’s office in 1938, when the last big piece of New Deal legislation ever passed, the Fair Labor Standards Act, was teetering before the House of Representatives. “Fred”, President Roosevelt said, as I heard the story, “I want you to go across the street [to the State Department building] find a vacant office with a desk, two chairs and a telephone, take a copy of the Budget Document with you, call me and give me the room number and then wait there all day. From time to time. members of Congress, sent by me, one by one, will knock on your door. And when they do, Fred, let them in, shut the door, open the Budget, and give them whatever they ask.”
Presidential scholar Richard Neustadt