Citizens United, States Divided: Evidence of Elasticity in Independent Expenditures
Douglas M. Spencer
University of Connecticut, School of Law
Abby K. Wood
U.C. Berkeley - Department of Political Science
April 14, 2012
Indiana Law Journal, Vol. 89, No. 1, 2014
What effect has Citizens United v. FEC had on independent spending in American politics? Previous attempts to answer this question have focused solely on federal elections where there is no baseline for comparing changes in spending behavior. We overcome this limitation by examining the effects of Citizens United as a natural experiment on the states. Before Citizens United about half of the states banned corporate independent expenditures and thus were “treated” by the Supreme Court’s decision, which invalidated these state laws. We rely on recently released state-level data to compare spending in “treated” states to spending in the “control” states that have never banned corporate or union independent expenditures. We find that while independent expenditures increased in both treated and control states between 2006 and 2010, the increase was more than twice as large in the treated states and nearly all of the new money was funneled through nonprofit organizations and political committees where weak disclosure laws and practices protected the anonymity of the spenders. Finally, we observe that the increase in spending after Citizens United was not the product of fewer, larger expenditures as many scholars and pundits predicted, and we note that people were just as likely to make smaller expenditures (less than $400) after Citizens United as they were before. This finding is particularly striking because it cuts against the conventional wisdom of spending behavior and also challenges the logic of those who disagree with the most controversial element of the Citizens United decision – the rejection of political equality as a valid state interest.
Number of Pages in PDF File: 64
Keywords: Campaign finance, election law, independent expenditures, political equality, Super PAC, difference-in-differences, quantile regressionAccepted Paper Series
Date posted: April 28, 2012 ; Last revised: May 10, 2013
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