The Impact of Public Financing on Electoral Competitiveness: Evidence from Wisconsin, 1964-1990

Abstract

Public financing schemes are often promoted as means of increasing the competitiveness of legislative elections and changing the way that candidates raise campaign funds. We investigate the impact that Wisconsin's system of public financing of state legislative elections, established in 1977, has had on these variables. Having compared trends in the pre- and postreform period, we find no evidence that providing challengers with public money has made elections more competitive, although it has narrowed the spending gap between incumbents and challengers. Most important, public financing has not increased the number of challengers, as incumbents increasingly face no opposition at all. We argue that challengers consider the overall strategic environment, and not just the question of fundraising, when making the initial decision to run. The availability of public money does little to encourage challenges to safe incumbents. While some changes in Wisconsin's system might marginally increase the likelihood of challenges, we conclude that public funding, by itself, cannot significantly change the competitiveness of legislative elections. The year 1992 was critical for legislative elections. Members of Congress were stung by one scandal after another: the savings and loan crisis, bounced checks, and grave ethical lapses. Citizens in a number of states put on the ballot, and activist groups sought to break the hold that alleged special interests have on the legislative process. The key criticisms revolved around two perceived shortcomings of the electoral process: first, that incumbents become entrenched and impossible to beat because of fundraising advantages and perquisites of office; second, that they are beholden to special interests and political action committees for their campaign funds and consequently subordinate the collective good to particularized interests. Public disillusionment with Congress filtered down to the state level, with a number of states moving to term limits and other restrictions on state legislatures. Campaign finance reform remains a controversial and