The Equilibrium Effects of Campaign Finance Deregulation on US Elections

Abstract

The US Supreme Court's 2010 decision in Citizens United v. Federal Election Commission was a major deregulation of campaign finance law. A new type of political action committee emerged, coined the Super PAC, with a relatively unfettered ability to raise money. This led to an unprecedented rise in spending across the general and primary elections. I estimate the influence of Super PACs on Congressional elections with a multi-stage model of political competition. I find that Super PACs have muted equilibrium effects due to political competition but, on average, have helped Republicans. Super PACs slightly increase challenger entry and pressure opposition incumbents to moderate positions.

Keywords: D72, K16, L30, M38