Results and Discussion: Discussion
The present study was approached with the assumption that a relationship of an undetermined nature existed between congressional representatives and U.S. sanctions targeting the Russian Federation. Given the geopolitical significance of these actions by the United States, in no large part due to the Federation’s position as a chief geopolitical market competitor in the energy sector, it was assumed that the steps taken to develop these actions could not have existed in isolation from market forces and business interests. Each of the hypotheses for the present study sought to quantify whatever relationship existed by exploring different facets of influence on the personal lives, political careers, and constituency stakeholders of congressional representatives.
Due to time constraints for the present study, the sample set was chosen with the intention of creating a large enough dataset to attempt to quantify any relationship without biasing the study due to the size. Each of the chosen congressional representatives was identified due to the qualitative evidence that, out of the full Congress, they would each be the most likely to hold an undetermined relationship with the energy sector — as leaders of one of the legs of the iron triangle. The period provided sufficient diversity of thought in the sample set as the specific platforms for both Democratic and Republican elected representatives shifted over time. The constitutional division of responsibilities and division of constituent influence between the U.S. House of Representatives and the U.S. Senate enhanced the diversity of the sample set given that only the Senate has a constitutional role in U.S. foreign policy, and the House of Representatives, with its two-year term schedule, is routinely in increased contact with constituents vis-à-vis the Senate. Moreover, the decision to record all observations as individual person-vote behavior enabled the maximization of the utility of the sample set, despite its size.
The results yielded evidence to suggest that energy interests did, in fact, influence the person-vote behavior of the sample set. However, the results did not support the three hypotheses, which posited that the influence, measured by the interaction term, would be positive in nature. The only observance of a statistically significant interaction term related to the hypotheses — occurring only during the presence of political campaign contributions from the energy sector (R2, 95–99% confidence level) — was negative, indicating that while a relationship existed, it influenced person-vote behavior against sanctions specifically targeting the Federation’s energy sector. When viewed on an aggregate level, holding any energy interest, including political campaign contributions, also rendered a negative statistically significant relationship (R4, 90–95% confidence level).
Because campaign contributions were the only energy interest variable that consistently rendered statistically significant relationships, it is very likely that this affected the energy index regression results. However, the results for the energy index regression are different than for campaign contributions, suggesting that the presence of the other energy interests — personal financial and constituency stakeholder — reduced the campaign contribution effect and rendered a more realistic relationship indicator. Beyond the interaction term, the results suggested that energy interests themselves increased the likelihood of person-vote behavior in general for Russian sanctions (90–95% confidence level) in addition to those sanctions that were related to the Federation’s energy sector (90–-99% confidence level).
On the surface, the results appear counterintuitive, that those congressional representatives with energy interests of any kind, with a focus on those receiving campaign contributions, would be more likely to oppose Russian sanctions concerning the energy sector given the competition that U.S. energy firms faced from the Russian Federation. The results, though, are in line with the qualitative evidence concerning the inefficiencies of sanctions regimes and the influence of business interests on the broader political agenda. As has been previously stated, U.S. academics and the foreign policy establishment have long argued that sanctions are not beneficial to public policy, nor are they beneficial to the U.S. economy (Haass, 1998b; Lektzian & Biglaiser, 2013). It is only logical that business interests would thus attempt to use their clout through different channels to influence public policy in a manner that best benefits them, which would be to oppose sanctions. The qualitative evidence argues that receiving campaign contributions or otherwise holding financial connections to specific firms or industries increases the likelihood of person-vote behavior in the business interest.
In the context of Russian sanctions, with Exxon reporting a loss of US$1 billion in the first year of energy-specific sanction implementation (ExxonMobil Corp, 2015), the qualitative evidence suggests that having energy interests would render person-vote behavior (a) more likely to cast a vote when the sanctions are related to energy and (b) more likely to cast a vote against those sanctions as they related to energy. The present study’s results confirmed the qualitative suggestion that having energy interests would (a) correlate to a statistically significant decision to engage in person-vote behavior concerning energy sanctions (90–99% confidence level) and that (b) would correlate to a statistically significant decision to oppose legislation that would negatively impact the energy sector as sanctions typically do for domestic industry (90–99% confidence level). Where the results diverge from the qualitative evidence concerns the increased likelihood to cast votes in favor of legislation targeting the Russian Federation in general, which suggests that holding energy interests renders a statistically significant decision to support legislation to weaken the geopolitical position of the Federation (90–95% confidence level) insofar as it does not impact domestic industry, thus rendering an increased likelihood to cast a vote against such legislation only when it is economically prudent.
Future Exploration
Because this relationship is quantifiable in even a small sample set, future exploration must include a complete sample set of both congressional chambers to ensure robustness. While the present study did include complete person-vote behavior from both chambers, it did not seek to identify the complete context of energy interests in the U.S. Congress. Moreover, the use of binary variables ignores the greater influence that comes from higher concentrations of energy interest, which the qualitative evidence suggests would exist (Ramanna, 2008; Yu & Yu, 2011). Future exploration would benefit from examining the differences in influence between those with varying concentrations of energy interest. Moreover, qualitative evidence argues that business interests can be grouped into those that are globally minded and those that are domestically focused and that these two groups come into conflict when attempting to influence public policy development and implementation (Cox, 1994). The present study did not take this conflict into account, instead utilizing the underlying theory of business competition influencing public policy as a static decision to oppose or support the period sanctions.
Future exploration would benefit from identifying how specific business interests — those firms with more domestic operations and those with more global operations — influence person-vote behavior. Lastly, future exploration would benefit from incorporating additional congressional sanctions not related to the Russian Federation in order to create a robust sample set that reduces any potential anti-Russian bias that might have influenced person-vote behavior as observed in the present study. These additional sanctions should include both energy and non-energy legislation in order to determine whether the strength of the relationship observed in the present study can be replicated across other congressional sanctions targeting other states or if it is merely limited to those concerning the Russian Federation.
If it cannot be observed across other sanctions and target states, a strong argument can be made that the results observed in the present study were influenced by anti-Russian bias and not necessarily by energy interests. While this would seem to discredit the conclusion of the present study — that the investment theory and the business conflict model can be applied to the energy sector and U.S. sanctions in order to model behavior — the presence of the strong statistical relationship between casting negative votes and energy-specific legislation, which is absent from casting negative votes and non-energy-specific legislation, maintains support for the conclusion that both theories are applicable to the energy sector and U.S. sanctions. The lack of transferability of person-vote behavior modeling to other sanctions would only suggest that both theories are not necessarily the strongest indicators of behavior concerning foreign policy development and that specific geopolitical factors need to be accounted for in modeling.
References:
Cox, R. W. (1994). Power and profits: U.S. policy in Central America. University Press of Kentucky.
ExxonMobil Corp. (2015). Form 10-K 2014. https://corporate.exxonmobil.com/-/media/Global/Files/investor-relations/investor-relations-publications-archive/ExxonMobil-2014-Form-10-K.pdf.
Haass, R. (Ed.) (1998b). Economic sanctions and American diplomacy. Council on Foreign Relations.
Lektzian, D., & Biglaiser, G. (2013). Investment, opportunity, and risk: Do U.S. sanctions deter or encourage global investment? International Studies Quarterly, 57(1), 65–78. https://doi.org/10.1111/j.1468-2478.2012.00761.x.
Ramanna, K. (2008). The implications of unverifiable fair-value accounting: Evidence from the political economy of goodwill accounting. Journal of Accounting and Economics, 45(2–3), 253–281. https://doi.org/10.1016/j.jacceco.2007.11.006.2.
Yu, F., & Yu, X. (2011). Corporate lobbying and fraud detection. The Journal of Financial and Quantitative Analysis, (46)6, 1865–1891. https://www.jstor.org/stable/41409670.
