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.

Key Takeaways

  • Pork-barrel spending is when taxpayer funds and government spending are used to help a specific group, rather than the overall country, as a way of benefiting elected officials or other special interests.
  • The policy is seen as very questionable ethically and can sometimes lead to the abuse of power; at the very least it suggests favoritism and impartiality.
  • Until Congress put a lid on it a decade ago, legislators often attempted to add "earmarks" that benefitted the lawmaker's state only to broad legislative bills.
  • Pork-barrel spending hurts the economy by using taxpayer funds to benefit a specific group while failing to support others simultaneously.

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 at the very least, the granting of special favors in return for other favors.

It's understood that the cost of mounting a campaign is high, but the idea of pork-barrel spending, or of using taxpayer money to benefit your own constituents so you can hang onto your seat in congress, is inherently unsavory.

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.

Pork-barrel spending is sometimes synonymous with patronage or rent-seeking, other terms for seeking to provide mutual benefits in a way that takes advantage of taxpayer funds.

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. 

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 happening in a particular lawmaker's state.