Abstract: Many redistributive programs use estimates of need to determine access. These esti- mates, in turn, depend on a formulaic combination of objective measures and subjective evaluations. Such formulas do not eliminate political influence, but instead force politicians to use industrial policy to target individuals by way of their positions as economic producers or consumers, rather than by their membership in a relevant political community. In the politics of farm subsidies, the government may lack the data or expertise to render political communities sufficiently legible to target via product-specific transfer schemes. We use these constraints to examine the impact of the US Department of Agriculture’s Market Facilitation Program (MFP) which provided over $16 billion in direct payments, surplus purchasing, and other forms of support to US agricultural producers from 2018 to 2020. According to official statements, these funds were allocated in response to “objective” econometric estimates of the damage caused by the US-China trade war. We use county and crop-level administrative data to reconstruct the formula used to significantly expand payments in 2019 and show how the determination of damages for particular crops propagated via the formula into county-specific compensation rates based on these counties’ prior planting decisions. We find that counties receiving higher levels of formula-induced compensation, on average, have higher Republican Party presidential vote shares in the 2020 presidential election. Instrumenting for actual MFP disbursements in 2019-2020 using the reconstructed formula, we find that each additional $10 million in MFP payments to a county increased that county’s 2020 Trump vote share by about 0.6 percentage points on average.
Moderator: Iain Osgood