Campaign Finance Reform and Electoral Competition

Abstract:     
Using state senate data from 1984 through the beginning of 2002, this paper finds that campaign donation regulations clearly reduce the competitiveness in political races. This is reflected in several dimensions. Conservative estimates indicate that different donation limits are associated with anywhere from a 4 to over a 23 percentage point increase in win margins. The regulations increase the probability that only one candidate will run for office. And they increase the probability that incumbents win re-election. Campaign finance regulations also tend to reduce the number of candidates who run for office by an average of about 20 percent.

Keywords: campaign finance regulation, McCain-Feingold

JEL Classification: D7

working papers series