The Political Economy of the U.S. Department of Agriculture Rural Business

The U.S. Department of Agriculture Rural Business-Cooperative Service (RBS) was established with the goal of fostering rural development through grants and low-interest loans. However, rural revitalization is only effective if funds reach their intended recipients. With congressional oversight of the U.S. Department of Agriculture and geographic concentration of RBS benefits, the RBS may deviate from its stated objectives to satisfy congressional preferences. Using RBS grant and loan data from 2006 to 2014, the author performs a test of the congressional dominance model. The empirical results show that congressional membership on the relevant House and Senate subcommittees is associated with greater RBS funding. Congressional influence is a plausible mechanism through which development funding fails to reach those in the areas of greatest need