Do earmarks crowd out private investment?

Cato:

More specifically, the authors examine what happens to a state when one of its senators becomes a chair of a powerful committee. First, the obvious, upon taking a power chairmanship, the value of earmarks increase almost 50%. This results in roughly a $200 million annual increase to the state. But the authors find this is not simply a transfer from the rest of the country to the state, it also depresses private capital investment and R&D spending in the state. On average, once a state has a senator obtain a powerful chairmanship, state level private investment in capital expenditures decreases $39 million annually and state private R&D decreases $34 million annually.