Politicians use money in different ways: Some enrich themselves while in office, others prioritize raising funds for their reelection campaigns, and yet others leave their position to take up a "golden parachute" job and work for the very special interests they were regulating while in office. Why do politicians use the money they have access to in different ways? What determines which one’s they prefer? And what consequences does it have? In this book, I argue that the different types of money in politics are connected and form an interdependent ecosystem. They are therefore partially fungible, so an increase in one form leads, as a second-order consequence, to a decrease in others. The relative prevalence of the different types is driven by the legal and electoral campaign environments that politicians operate in. And finally, I contend that how money enters politics has third-order consequences on important aspects of the quality of democracy.
I provide empirical support for my argument using a multi-pronged approach. First, I conduct a series of within-country studies for India, Brazil, and the U.S. In each case, I use newly assembled micro-level data on money flows and identify situations that allow me to isolate the effect of the legal and electoral campaign environments on the way money enters politics. Second, I present a series of case studies which establish that the same factors also drive cross-national differences. Finally, I show that how money enters politics affects various aspects of the quality of democracy, such as how voters view politicians or who wins elections.
The main conclusion of my book is that the current discourse, which focuses on how much money there is in politics, is insufficient. Because of the second-order effects, reforms often do little to alter the balance of power between the electorate and moneyed interests. And the third-order effects mean that the normative implications of money in politics do not simply follow from how much of it there is, but depend on how money is used and what this does to aspects of democratic quality. We therefore need to have a different conversation about money in politics, highlighting not just how much of it there is, but also focusing on how it is used.