Individual Donor Caps and the Distributions of Campaign Contributions in the Presidential Preprimary Post Increased Limits

25 Pages Posted: 25 Aug 2014

Date Written: 2014

Abstract

The Bipartisan Campaign Reform Act increased the individual donor limit to $2,000 per candidate per election and indexed the limit for inflation every two years. In this study, we analyze how the increase in the donor limit affected donor behavior and whether or not there is a partisan bias among candidates receiving the larger donations in the early phase of the presidential nomination elections. Examining this should allow us to determine how donors responded to the increased donor limit in presidential elections. Understanding this is important because it allows us to explore the intersection of wealth inequality and political influence. This study focuses on the preprimary period of the presidential race because it is the most important period to campaign fundraising and the stage that provides the sharpest control of several important political variables, given no contest is held in this period and most candidates have entered the race by this stage but few have dropped-out. This study assesses the 2000 election, representing one period before the increase went into effect, and the elections of 2004, 2008, and 2012, representing three periods after the increase went into effect. Descriptive statistics are used to determine if the increased limit is changing the distribution of donations and widening the gap between small and large donors. We find that although the donor cap has more than doubled and continues to increase with each passing presidential election, the most candidates are still raising donations in smaller amounts. However, a few candidates are raising increasingly larger donations since the new legal limit and these tend to be the frontrunners. There does not appear to be a partisan bias present among candidates who receive large donations, however we did find that the Republican incumbent in 2004 relied on much larger donations compared to the Democratic incumbent in 2012. The findings of this study should provide important information about how the donors responded to the law.

Suggested Citation

Sebold, Karen and Mitchell, Joshua, Individual Donor Caps and the Distributions of Campaign Contributions in the Presidential Preprimary Post Increased Limits (2014). APSA 2014 Annual Meeting Paper, Available at SSRN: https://ssrn.com/abstract=2453016

Joshua Mitchell

Independent ( email )

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