Political Fundraising Networks

The paper uses new data on congressional fundraising networks to test whether network structure influences fundraising performance. The results are consistent with two predictions of ``middleman'' models of network formation: first, fundraising networks are characterized by high levels of inequality; second, fundraising performance and network centrality are positively related. Employing a spatial IV strategy that controls for the endogeneity of network formation and endogenous social effects, I find that a one percent increase in a legislator's centrality yields a 0.627% increase in funds raised. The IV estimate is within one standard deviation of the nonspatial OLS estimate and is robust to alternative methods of estimation.