In high school, I worked at a garage door company that is the dominant firm in the Rhode Island market, which also has a few smaller competitors that service mostly smaller jobs. For the purposes of this blog post I'll call it ABC Garage Doors. ABC regularly makes political contributions, mainly to gubernatorial races in the hope for benefits like favorable labor rules, lower taxes, and increased access to government contracts. These favorable benefits can be thought of as the transfer of wealth Peltzman describes and the money spent doing so as rent-seeking.
Interestingly, ABC often contributes to both Republicans and Democrats, often within the same race. In Peltzman's model, K is defined as any spending by beneficiaries "in campaign funds, lobbying, and so on" to win support and reduce opposition. Giving to both candidates seems less about spending money to reduce opposition and more about purchasing political access regardless of who wins.
RI regulations prohibit corporations from donating so ABC's owner donates himself. Although it is required for campaigns to publicly report any donations exceeding $200, there is likely less negative press on ABC than larger corporations (which often fund through PACs), so the owner supports both candidates publicly and attends both parties' campaign events.
From ABC's perspective, this strategy is rational because it reduces the risk of backing the losing candidate and preserves relationships with whoever holds office. However, resources spent rent seeking could otherwise be used productively. Contributing to candidates with diametrically opposed positions also raises questions about whether these donations reflect genuine political preferences or primarily an attempt to secure favorable treatment.
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