Citizens United: A Theoretical Evaluation

25 Pages Posted: 6 Jun 2016

See all articles by Carlo Prato

Carlo Prato

Columbia University - Department of Political Science

Stephane Wolton

London School of Economics & Political Science (LSE) - Department of Government

Date Written: June 4, 2016

Abstract

Following the 2010 U.S. Supreme Court’s decision on Citizens United v FEC, interest groups engaging in outside spending can receive unlimited contributions from unions and corporations. Critics of the decision have rejected the notion, espoused by the majority opinion, that outside spending does not corrupt or distort the electoral process. Fewer, however, have examined the decision’s implications under the Court’s assumptions. Using a game-theoretic model of electoral competition, we show that informative outside spending from a group whose policy preferences are partially aligned with the electorate may reduce voter welfare. This negative effect is more likely to arise when the value of the interest group’s information is large, or congruence between voters and the interest group is high. Further, the regulatory environment produced by the Court’s decision is inefficient: the electorate would be better off if either outside spending were banned or coordination between candidates and the interest group allowed.

Keywords: Citizens United, Outside Spending, Supreme Court

JEL Classification: D70, D72, D74, D78, D82

Suggested Citation

Prato, Carlo and Wolton, Stephane, Citizens United: A Theoretical Evaluation (June 4, 2016). Available at SSRN: https://ssrn.com/abstract=2790175 or http://dx.doi.org/10.2139/ssrn.2790175

Carlo Prato

Columbia University - Department of Political Science ( email )

7th Floor, International Affairs Bldg.
420 W. 118th Street
New York, NY 10027
United States

Stephane Wolton (Contact Author)

London School of Economics & Political Science (LSE) - Department of Government ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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