How Does Pork Barrel Spending Hurt the Economy?

Pork barrel politics affect the economy in several ways. Pork barrel spending occurs when the government earmarks funds to be spent in a specific region of the country, usually as a favor to an elected representative from that region.

Such government spending often confers an economic benefit to the region involved, with the money typically going toward infrastructure and other projects that create jobs and improve quality of life. However, the effect on the rest of the country is negative, with taxpayers shouldering the cost of these pork barrel projects without receiving the benefits.

What Is Pork Barrel Spending?

When it was first introduced in 1863, the phrase "pork barrel" was initially a reference to any money a government spent on its citizens. But within a decade, the idea of pork-barrel politics had come to mean spending by a politician that benefited certain constituents in exchange for their support, either financial or via the ballot box.

Pork barrel spending is a reference with negative connotations, especially when it's mentioned in connection with Congress, as it can imply bribery or special favors in return for other favors.

Characteristics of Pork-Barrel Spending

The phrase "pork-barrel spending" is usually associated with any project that uses federal funds to benefit a narrow group of donors or special interests. Pork may be attached as appropriations to seemingly unrelated legislation, in an attempt to secure that Congressperson's vote.

Citizens Against Government Waste publishes an annual "Pig Book" of projects it considers pork-barrel spending. A project is categorized as "pork" if any of the following is met:

• Requested by only one chamber of Congress
• Not specifically authorized
• Not competitively awarded
• Not requested by the President
• Greatly exceeds the President’s budget request or the previous year’s funding
• Not the subject of congressional hearings
• Serves only a local or special interest

Pork-Barrel Politics Example

As an example of pork-barrel politics, consider a politician from a mid-sized city who wants government funds for a high-speed rail project connecting his city with another mid-sized city 100 miles away. He sells the government on the project and receives $700 million in federal funds. That money provides an economic boon to both mid-sized cities involved.

Employment increases as workers are hired to complete the project. Once the project is complete, travel between the two cities increases, which creates opportunities for businesses in other sectors.

That said, the benefit of such a project is very localized. It does not extend far beyond the two cities. In effect, the elected representative has received money from the entire country without providing the entire country with any benefits in return. This concept is known in economics as rent-seeking. The project's overall effect on most of the country is negative. The taxpayers pay taxes to the government to finance the project but do not receive anything in return for their money.

Historically, one example of pork-barrel spending is when Abraham Lincoln traded Civil War contracts to businessmen in the north in exchange for patronage jobs and campaign support. 

Pork Barrel Spending vs. Earmarks

In more recent years, the practice of "earmarking" became a variation of pork-barrel spending, something Congress put a moratorium on in 2010. Earmarking involves placing legislative add-ons, called earmarks, on appropriations bills as a way to redirect money to special projects in a particular lawmaker's state. Congress temporarily banned earmarks in 2011, forbidding legislators from slipping their pet projects into national appropriations bills.

Earmarking is similar to pork spending, in that both direct federal funds towards local interests. However, earmarking is viewed more positively, since earmarked projects are more likely to benefit the wider population. For example, improving bridges and highways serves localized interests, but the improved infrastructure also serves the wider community.

In some cases, the costs of earmarked projects can still exceed their economic benefits. One infamous example was the Bridge to Nowhere—a $220 million dollar infrastructure project to connect mainland Alaska to an island of only 50 people. The project was defeated in 2005, and became an issue in the 2008 election.

Another pervasive example is military spending, which is often used as a form of local economic stimulus as well as defense.

Community Project Funding

In 2021, House Democrats announced plans to revive earmarks, after rebranding them as "community project funding." Under the new rules, earmarks would be limited to 1% of discretionary funding and lawmakers would be able to submit no more than ten funding requests. The change would encourage bipartisan support for appropriations bills since lawmakers on both sides would be able to claim credit for funding local projects.

The Bottom Line

Pork-barrel spending, or earmarking, is the controversial practice of directing government funding in a way that serves local businesses or other special interests. While the term has strongly negative connotations, there is no clear distinction between pork-barrel spending and funding legitimate local projects. Although House Democrats temporarily prohibited the practice in 2011, they are now revisiting the practice.

Pork Barrel Spending FAQs

How Much Is Spent Each Year on Pork Barrel Spending?

Because of the negative associations of the term, there is no clear agreement on what qualifies as "pork-barrel spending." The lobbying group Citizens Against Government Waste identified 285 earmarks in the 2021 budget, at a total cost of $16.8 billion.

How Do Lobbyists Influence Pork Barrel Spending?

Industry groups and business interests may seek favorable legislation by rewarding friendly legislators with fundraising and donations. Unlike bribery, there's no direct exchange of money for votes—simply an understanding that they will continue to support legislators who vote the right way.

When Is Pork Barrel Spending Seen as Positive?

Pork-barrel spending or earmarks are often viewed favorably by the communities that benefit from them. For example, agricultural subsidies or industry tax breaks may seem like necessary spending by people who work in those industries, but others may perceive them as corporate welfare.