DP16842 The Politics of the Paycheck Protection Program

Author(s): Deniz Igan, Thomas Lambert, Prachi Mishra
Publication Date: December 2021
Keyword(s): COVID-19, Ideology, Lobbying, Paycheck Protection Program
JEL(s): D72, G21, G28, G32, G38, H12, H81
Programme Areas: Political Economy
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16842

This paper examines the incidence of special interests in the allocation of loans through the Paycheck Protection Program (PPP). We find that lobbying at the firm and industry levels helps obtain larger PPP loans during the pandemic. We also observe that PPP lending is more responsive to lobbying in ideologically less conservative areas as well as in industries less affected by the pandemic. Our findings are consistent with the notion that lobbying firms have experience in navigating administrative and policy complexity and can thus benefit more from aid provided under the PPP.