Campaign Finance Laws and Political Efficacy: Evidence from the States

Abstract

The decline of political efficacy and trust in the United States is often linked to the rise of money in politics. Both the courts and reform advocates justify restrictions on campaign donations and spending as necessary for the improvement of links between the government and the governed. We conduct the first test of whether campaign finance laws actually influence how citizens view their government by exploiting the variation in campaign finance regulations both across and within states during the last half of the 20th century. Our analysis reveals no large positive effects of campaign finance laws on political efficacy. Public disclosure laws and limits on contributions from organizations are in some cases associated with modest increases in efficacy, but public financing is associated with a similarly modest decrease in efficacy. ∗Previous versions of this paper were presented at the 2003 Annual Meeting of the American Political Science Association and 2003 Annual Meeting of the Midwest Political Science Association. We thank Barry Burden, Dick Niemi, the editors, and anonymous reviewers for helpful comments. Thanks also to Matt Jacobsmeier and Matt Stiffler for research assistance. †Department of Political Science, University of Rochester, Harkness Hall, Rochester, NY 146270146; 585-273-4779; david.primo@rochester.edu; Fax: 585-271-1616 ‡Department of Economics and Truman School of Public Affairs, University of Missouri, 118 Professional Building, Columbia, MO 65211; 573-882-5572; milyoj@missouri.edu; Fax: 573-882-2697