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Principal-agency theory was adapted from business and economics to explain the behavior of various government actors. Yet the idea of an agent and a principal is only depicted in a limited fashion when discussed in light of the realm of business and economics. Legal studies has grappled with the idea of agency well before political science or economics. I lay out the basic principles of both agency law and Congressional principal-agent theory. I then establish the groundwork for drawing important connections between agency law and principal-agency theory. I also analyze and attempt to ameliorate differences between these two theoretical approaches.

The purpose of this paper is to analyze the value of corporate political connections resulting from the revolving door of employment between political office and the for-profit corporation. The authors test whether there is value to firms from political connections provided by the appointment of former politicians to corporate boards or management teams. The authors also test to see if passage through the door in the other direction, from the corporate world to public office, generates value for firms. Do firms whose former employees gain public office earn excess returns following their appointment or election to these positions?

The methodology used in this study focusses on an empirical analysis of the political connections of US firms over the sample period 1996-2011. The analysis emphasizes the wealth effects associated with the announcement of hiring former politicians to corporate boards or the gaining of political office by former corporate employees.

The authors find that politicians becoming corporate directors is 2.5 times more common than corporate executives gaining public office. The authors determine that industries with extensive government regulation most often hire former politicians. The authors find that the office held by former politicians matters. The authors find that longevity in a cabinet position is important while formal Congressional or Senate leadership positions are not. Surprisingly, the authors determine the longer politicians are out of office, the more value they are able to provide to the firm. Finally, the authors discover that firms which hire former politicians have significantly positive long-term abnormal returns, but firms whose managers enter politics do not.

This study is highly original in its examination of political connections resulting from door swing in both directions. Further, the analysis of longevity, time out of office, and position held adds to the contributions made by this study.

During the 2020 election cycle, 2,276 super PACs spent over $2.1 billion in federal elections. This chapter argues that changes made to the US campaign finance system brought about by the Citizens United v. FEC (2010) and SpeechNow.org v. FEC (2010) cases have destabilized the American political system by fueling tensions between right-wing and left-wing populist factions and by contributing to congressional corruption. By moving away from the political corruption standard and toward the free speech standard in Citizens United, polarizing wealthy mega-donors and dark money sources have come to play a dominant role in congressional elections. These cases also helped to contribute to a two-tiered campaign finance regulatory structure that distinguishes between campaign contributions given directly to federal candidates and political money contributed to super PACs to support or oppose federal candidates. In the 2020 congressional elections, PACs and super PACS outspent both major party candidates combined in 35 House and Senate races. Super PACs are serving as “shadow parties” by targeting competitive races for the purpose of swaying partisan control of Congress. This study also shows that an exceedingly high percentage of super PAC money is spent on negative advertising that further divides rather than unifies the nation. This chapter also highlights the corrupting influence of congressional leadership PACs and examines how super PACs have enabled foreign and dark money sources to illegally influence congressional campaigns.

The federal budgeting process is wrought with conflict that makes it nearly impossible for the budget to be passed on time, or so it seems. One aspect overlooked is the effects of statutory Pay-As-You-Go (PAYGO) rules. The cursory evidence indicates PAYGO may be beneficial under certain circumstances. The analysis relies on an Autoregressive-Moving-Average (ARMA) time series model with data from appropriations bills signed into law from fiscal years 1994 to 2014. The findings indicate mixed effects for PAYGO statutes with a shorter budgeting timeline under the Budget Enforcement Act of 1990, but a longer timeline under the Statutory PAYGO Act of 2010. Additional findings suggest substantive relationships between the length of the budgeting process and party polarization, presidential leadership, and the economy.

Biennial budgeting and appropriations cycles have been a popular idea among many members of Congress for the past twenty years. Despite widespread bipartisan support for biennial budgeting in the 1980s, the first House vote on the subject, in 2000, resulted in a narrow defeat for biennial budgeting. This article analyzes the merits of biennial budgeting and the reasons for its defeat, arguing that during the 1990s biennial budgeting lost its sense of urgency because of the erasure of the federal deficit and became a more partisan issue than it previously had been.