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Campaign finance reform and electoral competition


  • John Lott



Using state senate data from 1984 through the beginning of 2002, this paper finds that campaign donation regulations clearly reduce the competitiveness in political races. This is reflected in several dimensions. Conservative estimates indicate that different donation limits are associated with anywhere from a 4 to over a 23 percentage point increase in win margins. The regulations increase the probability that only one candidate will run for office. And they increase the probability that incumbents win re-election. Campaign finance regulations also tend to reduce the number of candidates who run for office by an average of about 20 percent. Copyright Springer Science+Business Media B.V. 2006

Suggested Citation

  • John Lott, 2006. "Campaign finance reform and electoral competition," Public Choice, Springer, vol. 129(3), pages 263-300, December.
  • Handle: RePEc:kap:pubcho:v:129:y:2006:i:3:p:263-300
    DOI: 10.1007/s11127-006-9028-x

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    References listed on IDEAS

    1. Bender, Bruce, 1988. "An Analysis of Congressional Voting on Legislation Limiting Congressional Campaign Expenditures," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 1005-1021, October.
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    6. Peltzman, Sam, 1980. "The Growth of Government," Journal of Law and Economics, University of Chicago Press, vol. 23(2), pages 209-287, October.
    7. James B. Kau & Donald Keenan & Paul H. Rubin, 1982. "A General Equilibrium Model of Congressional Voting," The Quarterly Journal of Economics, Oxford University Press, vol. 97(2), pages 271-293.
    8. Milyo, Jeffrey & Groseclose, Timothy, 1999. "The Electoral Effects of Incumbent Wealth," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 699-722, October.
    9. Stephen Coate, 2004. "Political Competition with Campaign Contributions and Informative Advertising," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 772-804, September.
    10. Lott, John R, Jr, 1990. "An Explanation for Public Provision of Schooling: The Importance of Indoctrination," Journal of Law and Economics, University of Chicago Press, vol. 33(1), pages 199-231, April.
    11. Crain, W Mark & Leavens, Donald R & Tollison, Robert D, 1986. "Final Voting in Legislatures," American Economic Review, American Economic Association, vol. 76(4), pages 833-841, September.
    12. Snyder, James M, Jr, 1992. "Long-Term Investing in Politicians; or, Give Early, Give Often," Journal of Law and Economics, University of Chicago Press, vol. 35(1), pages 15-43, April.
    13. Stratmann, Thomas, 1992. "Are Contributions Rational? Untangling Strategies of Political Action Committees," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 647-664, June.
    14. Daniel, Kermit & Lott, John R, Jr, 1997. "Term Limits and Electoral Competitiveness: Evidence from California's State Legislative Races," Public Choice, Springer, vol. 90(1-4), pages 165-184, March.
    15. Hersch, Philip L & McDougall, Gerald S, 1994. "Campaign War Chests as a Barrier to Entry in Congressional Races," Economic Inquiry, Western Economic Association International, vol. 32(4), pages 630-641, October.
    16. Crain, William Mark & Tollison, Robert D, 1976. "Campaign Expenditures and Political Competition," Journal of Law and Economics, University of Chicago Press, vol. 19(1), pages 177-188, April.
    17. repec:cup:apsrev:v:72:y:1978:i:02:p:469-491_15 is not listed on IDEAS
    18. Stephen G. Bronars & John R. Lott Jr., 1995. "Do Campaign Donations Alter How a Politician Votes?," University of Chicago - George G. Stigler Center for Study of Economy and State 118, Chicago - Center for Study of Economy and State.
    19. Thomas Stratmann & Francisco J. & Aparicio-Castillo, 2006. "Competition policy for elections: Do campaign contribution limits matter?," Public Choice, Springer, vol. 127(1), pages 177-206, April.
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    Cited by:

    1. John Maloney & Andrew Pickering, 2013. "Political Competition, Political Donations, Economic Policy and Growth," Discussion Papers 13/21, Department of Economics, University of York.
    2. J├╝rgen Huber & Michael Kirchler, 2013. "Corporate campaign contributions and abnormal stock returns after presidential elections," Public Choice, Springer, vol. 156(1), pages 285-307, July.

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