Corporate Donations and Political Rhetoric: Evidence from a National Ban

Abstract

Do campaign finance regulations influence politicians? We study the effects of a French ban on corporate donations passed in 1995. We use a difference-in-differences approach and a novel dataset combining the campaign manifestos issued by every candidate running for a seat in the French parliament with detailed data on their campaign contributions. We show that banning corporate donations discourages candidates from advertising their local presence during the campaign, as well as economic issues. The ban also leads candidates from non-mainstream parties to use more polarized language. These findings suggest that private donors shape politicians’ topics of interest, and that campaign finance reforms may affect the information made available to voters through their impact on candidates’ rhetoric.

Keywords: Elections, Campaign finance, Corporate donations, Campaign manifestos, Political rhetoric, Text analysis

JEL Classification: D72, P48, H7