Systemic Effects of Campaign Spending
33 Pages Posted: 31 Jul 2012 Last revised: 31 Mar 2013
Date Written: March 24, 2013
Perhaps no other issue surrounding the health of our democracy worries American voters more than the role of money in elections, and campaign finance reform is a salient topic as a result. Academic studies of campaign finance, however, have focused their analyses at the level of the individual campaign -- relevant for a variety of important questions but not calibrated for studying the impact of policy instruments that affect the entire legislature at once. I offer a new focus on the systemic effects of campaign spending. Using a natural experiment in U.S. state legislatures, I find that a ten percentage point increase in the Democratic (or Republican) share of total campaign contributions causes a five percentage point increase in the Democratic (or Republican) share of the legislature. Campaign spending has a large effect on electoral outcomes, and regulations on which groups are permitted to donate are a potent policy lever.
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