The Effect of Campaign Finance Laws on Electoral Competition: Evidence from the States

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Congress is now considering new regulationson campaign finance. Although their goal of preventingcorruption or its appearance is important,those restrictions may reduce the competitivenessof elections.

Many states have enacted regulations on campaignfinance, including limits on how much canbe given to political parties. A close analysis ofthose state limits shows that restrictions on howmuch parties can raise and contribute to theirnominees hinder the ability of candidates, especiallythose in close races, to raise money. Suchrestrictions do not hurt incumbents as much asthey do challengers, since sitting lawmakers canattract more money from interest groups andindividual donors. State regulatory limits on partiesreduce the vote totals of challengers, therebyreducing the competitiveness of elections.

Thad Kousser and Ray LaRaja

Thad Kousser is a graduate student in political science at the University of California, Berkeley. Ray LaRaja is an assistant professor of political science at the University of Massachusetts, Amherst.