Interest Groups, Income and Policy Choices: Evidence from Parliamentary Decisions and Referenda

We analyze to which extent business interest groups positions are reflected in political decisions when politicians have links to the private business sector. Politicians with links to businesses are 20 to 35 percentage points more likely to vote in line with the business group’s preferences relative to politicians without ties to business. Matching data from parliamentary decisions and referenda allows us to estimate these effects while controlling for constituent and party preferences on the identical policy issues.