Plenty of government intervention means plenty of data – data that can be creatively exploited to study long-standing questions of political economy such as….

Do politicians vote based on ideology, constituent preferences or to get lots of cash from lobbyists to pay for the re-election campaigns?

“The Political Economy of the U.S. Mortgage Default Crisis”  by Atif Mian, Amir Sufi and Francesco Trebbi (forthcoming in AER I believe) uses data on voting in Congress on the American Housing Rescue and Foreclosure Prevention Act AHRFPA and the Emergency Economic Stabilization Act EESA to study politicians’ voting behavior.  AHRFPA supported mortgage holders who were financially distressed  and EESA supported banks supplying them with liquidity.  We  can think of them as constituents and special interests.  There is data on default rates in a district at the ideological level  – you can see the default rate among Democrats and Republicans.  There is data on contributions made by the financial industry to a candidate’s campaign war chest.

There is no variation in Democratic votes for AHRFPA so the paper studies Republican votes. The authors find that Republican politicians’ votes for the bill are correlated with the default rate of Republican constituents in their district.  Moreover, if the district lies in a Presidential swing state and is more competitive,the response is stronger.

On the EESA, the authors find that campaign contributions by the financial industry are correlated with voting for the bill.  Also, retiring politicians less likely to vote for the bill, even if they received campaign contributions from the financial industry in the past.  Finally, the more ideological a politician is, the less likely he is to respond to these measures (ideology is measured on some scale that is usually employed in these studies).

Lots of interesting and provocative results.  Lots of caveats and subtlety I cannot do justice to in this post.  Take a look at the paper.