Presidential particularism, the Paycheck Protection Program (PPP), and the Biden administration

Abstract

Federal spending has been a strong governing instrument for the president and governing party, who have pursued their political and electoral benefits by strategically allocating federal grants, procurements, and loans to subnational governments. The Paycheck Protection Program (PPP), in which the federal government issued almost $1 trillion in loans over three rounds between April 2020 and May 2021 to support small businesses' operations in response to the COVID‐19 crisis, was no different. I build on previous research in distributive politics by examining the third round of PPP loans, in which $277 billion was allocated in the first months of the Biden administration. I find significant evidence of presidential particularism, as the Biden administration issued a large amount of PPP lending to Pro‐Biden and core Democratic counties as well as to congressional districts with copartisan (Democratic) house members. Furthermore, the magnitude of these presidential particularism findings immediately following the presidential election year is considerably larger compared to previous studies.