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.

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 for 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.