Independent Expenditures Research Articles

Trends in Michigan Supreme Court Elections 2000–2012

ABSTRACT This article explores various trends in Michigan Supreme Court elections from 2000 through 2012. Within the backdrop of the structure of Court elections, dimensions such as incumbency, electoral competitiveness, the role of parties, and campaign spending are examined. This study finds that while incumbents still retain some important advantages, incumbents are no longer automatically re-elected. Moreover, Supreme Court elections are becoming increasingly competitive, as the margins of victory have been reduced substantially in the most recent elections. Even though Supreme Court general elections are officially non-partisan, political parties play a major role, with a formal role in the nominations process, but also through independent expenditures and issue advertising on television. Interest groups and parties both have been outspending candidates in recent elections, and thus have added to the negative tone of Court campaigns. An overall trend of increased campaign spending has been found during the period investigated. In addition, a distinct difference in the level of electoral competitiveness and overall campaign spending was identified when comparing the 2000 through 2006 elections with the 2008 through 2012 elections.

Monetary Growth Theory under Perfect and Monopolistic Competitions

This article analyzes the difference of properties of economic growth theory between perfect and monopolistic competition. Whether or not capital investment is constrained by effective demand is the crucial factor which characterizes economic growth theories in different degree of competition. Whenever each firm faces a downward sloping demand curve the location of which is determined by the strength of effective demand (i.e., the real GDP), its capital accumulation is inevitably constrained by effective demand. Thus, as far as business environment is kept unchanged, so is capital investment. However, when the good market is perfectly competitive, firms never perceive such demand constraint, thereby capital investment advancing autonomously independent of the phase of business cycle. An important macroeconomic implication of such a difference of the attitude toward capital investment is as follows. When an economy is in perfect competition, capital investment becomes an independent driving force of economic growth as Keynes considers, although it is subject to other independent expenditure (e.g., the government expenditure) and falls into a subsidiary component of effective demand otherwise.

Constitutional Corruption: The Aftermath of Citizens United v. FEC

There is a great irony that currently pesters the political forefront of America. It echoes across television networks, resonates throughout the radio, and advertises itself around the internet as the words of American politicians and candidates who repeatedly avow their commitment to “getting back to the issues.” This is what the people wanted. This is the direction they asked for; this is not the direction they received. Since the 2010 Supreme Court case, Citizens United v. Federal Election Commission, “the issues” have been plunged further into a monetary power struggle, where they are being drowned out by the Super PAC. After planning to air its documentary Hillary on then-Senator Hillary Clinton, Citizens United experienced legal trouble before broadcasting the documentary due to regulations put in place by Bipartisan Campaign Reform Act of 2002. As a result, the company sought an injunction from the DC District Court to permit the airing of its film. Rejected at the district level, Citizens United appealed the case to the Supreme Court where it ended in a highly contentious 5-4 ruling.The Supreme Court ruled in favor of Citizens United, overturning McConnell v. FEC, ignoring precedent set in Buckley v. Valeo, and declaring the Bipartisan Campaign Finance Reform Act unconstitutional for the restrictions it placed on corporate independent campaign expenditures. To begin, this paper will explore the evolution of money in American politics and will discuss Supreme Court precedent with regard to campaign finance. From here, it will consider the connections of earlier case law to the Citizens ruling and show how the Supreme Court falsely characterized corporations as equivalent to individuals. Next, the paper will demonstrate that the “facial” review of the Bipartisan Campaign Finance Reform Act was incorrect and should have instead been an “as-applied” review. Finally, the essay will conclude by explaining how Citizens United v. FEC fundamentally changed the campaign finance realm by facilitating super-PACs; the institutions that have added egregious amounts of cash to an already money-laden system.

Super PACs and Financing the 2012 Presidential Election

This essay provides an initial assessment of competing claims about the impact of super PACs and also offers early insights on what super PACs are doing in this election cycle and what impact it may have on the 2012 presidential election and future elections.

Super Pacs and the 2012 Elections

Are the 2012 elections being “bankrolled by America’s most powerful interests?” More specifically, how have Super PACs and other independent organizations acted in the wake of the decision, what effects have they had on the electoral process to date, and what implications might their activities have for the conduct of American democracy. This paper will examine a number of potential concerns about the unlimited donations to and independent expenditures by Super PACs.

On the Temper of the Times

[ILLUSTRATION OMITTED] In 2011, Ferrel Guillory, director of the Program on Public Life, sat down with his friend and colleague Jack a distinguished journalist and the author of several books on the South, including the influential The Transformation of Politics. Bass discussed the advantages of his small-town roots, finding a career in journalism that coincided with the emergence of the Civil Rights Movement, and even his own short-lived foray into politics. His unplanned life brought insights about the Southern Strategy and the colorful and not-so-secret lives of Strom Thurmond, as well as memories of working with Jacqueline Kennedy Onassis, interviewing Bill Clinton and Jimmy Carter, and much more. He also previewed his next book, which provides a historical context for the Citizens United v. Federal Election Commission decision, the Supreme Court's landmark ruling that has allowed corporations to make large contributions as independent expenditures in the 2012 campaign. A SMALL TOWN CALLED NORTH Ferrel Guillory: Tell me about North, South Carolina. Jack Bass: I grew up in North. North was named for Colonel John North, who was one of three men who gave most of the land for the town, and he had been a lance corporal in the Civil War. He was no doubt a colonel in the Confederate Veterans Association, and his granddaughter worked in my father's store. I was the youngest of seven. My father, Nathan was an immigrant from Lithuania. He was quite successful until the boll weevil came through in the 1920s. Then he left and stayed for a little while in Morristown, New Jersey, then Lowell, Massachusetts, where my youngest sister, who's four years older than I am, was born, and then got a letter from someone back in North saying they thought North could support another store again. North was in a majority-black county, and it was small, 700-800 people, but it was a shopping center for an area probably about eight miles in circumference. My father was sort of the prototypical archetype of the small-town southern Jewish merchant, a big FDR Democrat, big New Deal Democrat, and stayed well-informed. But he was part of the Masonic Lodge, and all the stores in town would close on Wednesday afternoon, and they'd all get together for a fish fry. Well, the fish fry was a poker game. My mother, Ester Cohen, came to this country with her whole family, when she was two, from Poland. She had, I think, only about six years of education. She had a minor health problem, but it was sufficient that she didn't finish school. What was the experience of your family? I took my nephew from Chicago once to North, maybe fifteen years ago, and we went by a barber shop where I knew the guy, and as he put it, We treated your father just like he was one of us. My son is just completing a family history, so I explained to him that everybody else would call somebody Mr. Joe, Mr. Bob, but they always called my father Mr. Bass, not Mr. Nathan--slight differences. Essentially, if you were Jewish in a small southern town, with the Baptists and Methodists, so being a person of the Old Testament, you were fully accepted. Plus the fact you were white, so you were accepted as white. I lived in North until I stayed in college. I was the sixth member of my family to go to University of South Carolina. Graduated in '56. I was editor of The Gamecock, the student newspaper. THE EMERGENCE OF THE CIVIL RIGHTS MOVEMENT Is there an incident, something that galvanized your interest in southern politics, that propelled you into your career? In 1960 things were just beginning to turn in the South. I'd been back on the East Coast for two months the previous fall, a Navy special thing, and you could feel it in the air. People would talk about it. So I ended up coming back. I'd worked two summers for the Charleston News and Courier in college in the sports department. …

Regaining Confidence: Protecting the Sanctity of Elections Without Burdening Speech

This article outlines judicial opinions on campaign expenditure and contribution limits by reviewing specific state and federal laws subject to constitutional challenge. It delves deeper into the purpose of such limits through an empirical lens and ends by offering legislative recommendations that protect against campaign finance corruption without burdening the First Amendment. The author offers concluding remarks as to why a constitutional amendment limiting free speech related to independent expenditures may seem necessary but could actually do more harm than good.

Citizens United, States Divided: Evidence of Elasticity in Independent Expenditures

What effect has Citizens United v. FEC had on independent spending in American politics? Previous attempts to answer this question have focused solely on federal elections where there is no baseline for comparing changes in spending behavior. We overcome this limitation by examining the effects of Citizens United as a natural experiment on the states. Before Citizens United about half of the states banned corporate independent expenditures and thus were “treated” by the Supreme Court’s decision, which invalidated these state laws. We rely on recently released state-level data to compare spending in “treated” states to spending in the “control” states that have never banned corporate or union independent expenditures. We find that while independent expenditures increased in both treated and control states between 2006 and 2010, the increase was more than twice as large in the treated states and nearly all of the new money was funneled through nonprofit organizations and political committees where weak disclosure laws and practices protected the anonymity of the spenders. Finally, we observe that the increase in spending after Citizens United was not the product of fewer, larger expenditures as many scholars and pundits predicted, and we note that people were just as likely to make smaller expenditures (less than $400) after Citizens United as they were before. This finding is particularly striking because it cuts against the conventional wisdom of spending behavior and also challenges the logic of those who disagree with the most controversial element of the Citizens United decision – the rejection of political equality as a valid state interest.

Money Talks: The Impact of Citizens United on State Elections

The U.S. Supreme Court has ruled that restrictions on independent political expenditures by corporations and labor unions are unconstitutional on First Amendment grounds (Citizens United v. FEC, 2010). In this paper, we test the hypothesis that the decision gave an electoral boost to Republicans, at the expense of Democrats. The 50 states provide an ideal testing ground for this hypothesis. The ruling only affected a subset of states since the majority of states already had no restrictions on independent expenditures, allowing us to obtain difference-in-differences estimates of the short term effects of the ruling on electoral advantage. We find that Citizens United had a positive and statistically significant effect of approximately seven percentage points on the probability of Republicans winning in state congressional elections.

Taxation with Reservations: Taxing Nonprofit Political Expenditures After Citizens United

Section 527 of the Internal Revenue Code generally exempts political organizations from federal income tax, but not on their net investment income. Section 527(f) imposes a similar tax on the “political activity” of Section 501(c) tax-exempt organizations like trade associations, labor unions, and tax-exempt lobbying organizations, in order to discourage use of such organizations to avoid the Section 527 investment income tax. The definition of “political activity” for these purposes was clarified in 1980, when Treasury promulgated regulations under Section 527(f). These regulations left the door open for future investigation and regulation in the form of “Reserved Regulations,” and Treasury assured taxpayers that any adverse changes to the regulations would be prospective. The Reserved Regulations remain reserved to this day. The “reserved” gap in the regulations did not matter much for the first thirty years. Section 501(c) organizations, which are usually corporations (or unincorporated labor unions), were already constricted in their conduct of Section 527-type political activity by federal election laws that prohibited them from making independent expenditures supporting or opposing candidates. When the Citizens United decision came down, the first wave of reaction concerned the potential uses and perceived abuses of this new freedom by business corporations. Quickly, however, commentators noted that the Supreme Court had also created an opportunity for Section 501(c) organizations—free from income taxation, and (if careful) free from disclosure obligations—to engage in heretofore unprecedented levels of independent, expressly political activity. In theory, Section 527(f) and its Treasury Regulations discouraged this free-for-all by taxing the political expenditures of such entities, except that until the Reserved Regulations are promulgated, any political expenditures “allowed” by the FECA escape the tax. After Citizens United, what is “allowable” has mushroomed: A literal reading of the existing regulations renders all of those independent expenditures untouchable under Section 527(f). While some practitioners and their clients may be willing to operate as if this literal, but in our view unreasonable, outcome is the best interpretation under the circumstances, others may prefer a more nuanced and, we believe, credible approach. In this article we examine the background of Section 527(f) and the Reserved Regulations, summarize the Internal Revenue Service's few attempts to interpret the latter, and then present our proposal for a revised interpretation of the current regulations. We hope this proposed framework will be helpful both to practitioners and counsel who are wrestling with similar matters, and to Treasury, should it decide it is finally time to promulgate the Reserved Regulations.

Corporate Governance of Political Expenditures: 2011 Benchmark Report on S&P 500 Companies

Corporate accountability and disclosure of expenditures appears to be increasing, with the boards of 31 percent of S&P 500 companies now explicitly overseeing such spending, compared to 23 percent in 2010. However, this increased oversight and transparency does not appear to correlate with less spending, as companies with board oversight of expenditures spent about 30 percent more in 2010 than those without such explicit policies. This paper examines two years of corporate spending governance data collected on all U.S. companies in the S&P 500 in 2010 and 2011, documenting an increasing role for boards of directors and greater transparency about the process companies use to spend money in politics - both directly in campaigns and indirectly through trade associations and 501(c)4 non-profit groups. It finds voluntary disclosure of money spent remains limited, however, particularly for indirect spending, and inconsistencies between what companies report and data gleaned from public records. The paper also calculates a direct spending footprint for S&P 500 companies - the amount of money companies contributed to national committees and state-level candidates, parties and ballot initiatives, as well as federal lobbying - concluding companies disbursed $1.1 billion in 2010. In addition, the paper provides comparative political spending intensity figures normalized by revenue for different sectors. Two case studies examine ballot initiatives spending in California by PG&E in the 2010 election and indirect corporate support for judicial races in Ohio by Procter & Gamble. Appendices provide an analysis of current investor campaigns for more disclosure of spending and excerpts from corporate policies about independent expenditures.

The End of Campaign Finance Law

The Article argues that Citizens United v. FEC ended campaign finance law as we long knew it, but along lines that have little to do with corporate electioneering. Although the public outcry focused on the decision’s narrow effect on corporations, the Article demonstrates how the decision’s broader logic transformed campaign finance law beyond corporate electioneering and led within months to the nearly complete de-regulation of independent expenditures in time for the 2010 elections. Those elections provided only a glimpse of what the Article calls the reverse hydraulics of de-regulation, and as the Article argues, this new de-regulated world of campaign finance is not a better one. Citizens United therefore is a turning point not just for campaign finance law, but all regulation of the relationship between campaign money and the political process. However, the Article surprisingly concludes in the end that the Supreme Court may still be somewhat sympathetic to alternate forms of regulation of political corruption, notwithstanding Citizens United’s broad skepticism about corruption. Namely, the Court may be more sanguine toward government regulation of campaign money’s influence when it is structured as ex post regulation of the legislative process on the back end, as opposed to the ex ante structure of campaign finance regulation. Citizens United, when considered in light of other recent Court decisions, points this way forward for campaign finance reform without campaign finance regulation.

Corporate Independent Spending in the Post-BCRA to Pre-Citizens United Era

This paper proposes a theory of political action based upon ownership structure and tests this theory utilizing data on independent expenditures during the campaign finance regulatory regime consisting of the period after the Bipartisan Campaign Reform Act of 2002 and before the U.S. Supreme Court's Citizens United decision in 2010. The results suggest a strong relationship between the presence of an entrepreneur or founding family and firm participation in electoral politics via contributions to independent political organizations. Both privately held and publicly traded firms with a principal owner present are more likely to contribute to independent political organizations in the first place, and once they do contribute, give a far greater amount relative to firms without a principal owner. The implications for the post-Citizens United era and possible motivations behind independent expenditures and their impact on other stakeholders including investors, employees, competitors, and the public are discussed. This paper contributes to our understanding of which corporate interests are most likely to spend money on electoral politics independent of the political party or candidate and seeks to broaden discourse about why these actors might participate in elections in the first place as well as the impact of their participation.

Citizens United, Public Health, and Democracy: The Supreme Court Ruling, Its Implications, and Proposed Action

The 2010 US Supreme Court Citizens United v Federal Election Commission 130 US 876 (2010) case concerned the plans of a nonprofit organization to distribute a film about presidential candidate Hillary Clinton. The Court ruled that prohibiting corporate independent expenditures for advocacy advertising during election campaigns unconstitutionally inhibits free speech. Corporations can now make unlimited contributions to election advocacy advertising directly from the corporate treasury. Candidates who favor public health positions may be subjected to corporate opposition advertising. Citizen groups and legislators have proposed remedies to ameliorate the effects of the Court's ruling. The public health field needs to apply its expertise, in collaboration with others, to work to reduce the disproportionate influence of corporate political speech on health policy and democracy.

Transparent Elections after Citizens United

Where do disclosure laws stand post-Citizens United? What does the 2010 U.S. Supreme Court ruling mean for state-based laws? And are disclosure laws constitutionally sound?This report examines these questions and urges transparency through modest changes to state-based election laws. The report finds that recent Supreme Court decisions reaffirm the constitutionality of disclosure – and show an ongoing need to promote transparency in the money in politics realm.The first part of the report offers a primer on campaign finance laws in 2011. In case after case, the U.S. Supreme Court has upheld the constitutionality of both disclaimers and disclosures for two types of political ads: (1) independent expenditures which expressly advocate for or against a candidate and (2) electioneering communications.The second part of the report shows an urgent need for states to improve their disclosure laws in the wake of the Citizens United decision. In 24 states, new political players are now allowed into elections. Yet even in states that were not directly affected by the recent Supreme Court ruling, there is an urgent need to ensure that extant disclosure laws are in step with the way modern elections are conducted. Moreover, this report shows that states focus not only on spending by candidate committees and political parties, but also on outside spending by interest groups which is done independently of candidates or parties.The third section explores the Constitutional interests states have in providing the voting public with robust disclosure of the sources of money in politics including:•The Voter Informational Interest in Candidate Elections;•The Anti-Corruption Interest in Candidate Elections;•The Anti-Circumvention Interest in Candidate Elections;•The Electoral Integrity Interest in Ballot Initiatives; and•The Due Process Interest in Judicial Elections.Policy suggestions are laid out in part four of this report. First, mimicking the campaign finance reporting that is required in federal elections, states should adopt laws to capture the funders of independent expenditures. Second, states should adopt disclosure for electioneering communications (or what are often known as “sham issue ads”). However, these disclosure laws should be crafted carefully to avoid capturing tiny political expenditures in state elections. Third, states can consider adopting disclosure laws that are more expansive than federal laws. For example, the federal law does not currently regulate electioneering communications that appear in print. But states may have many valid reasons for requiring disclosure of non-broadcast sham issue ads.Given the expanded use of non-profits to veil political spending, states need to take a hard look at whether their current disclosure laws capture this type of spending adequately. Examples from California and Minnesota show how states might tackle this thorny issue through reporting requirements. An example from Connecticut also shows how states may achieve transparency through the use disclaimers which name top funders in the political ad itself.Finally, this report encourages accountability for corporate political spending through modest changes to states’ corporate laws in addition to changes to their elections laws. These changes could include requiring companies to provide shareholders with a comprehensive list of political spending on a periodic basis and/or allowing shareholders the ability to vote on a corporation’s future political budget.This report concludes that the Citizens United, Doe, and Caperton cases reaffirm both the constitutionality of disclosure and the continuing need for transparency around who is funding election battles. Consequently, states have wide latitude to require disclosures not only from classic political committees, but also any entity funding independent expenditures or electioneering communications in future state elections.

Corporate Powers and Political Speech - Implications for Korea of Recent US Supreme Court Decisions (Korean)

Citizens United v. FEC made almost every US lawyer, politician and scholar worried or triumphal. Corporations would reign over campaign scenes with corruptions, citizens would lose interest in the democratic process, and shareholders would have no control over management decisions on independent expenditure for political speech, many predicts. Corporations can exercise their freedom of speech to opine on political issues, campaign finance law is coherent and predictable, and shareholders shall monitor the management by fighting against the management or divestiture, winners boast. Several bills are pending at US Congress to prevent foreign governments' influence and make the corporate expenditure more transparent. Contrary to the situation in the US, Korean law completely prohibits any corporate contribution or expenditure since 2004. In 2006, the Constitutional Court in Korea rejected a challenge without reviewing the merits of the arguments. Thus, politicians have been financing campaign through individual's contribution, supports from the party, and private sources, part of which were reimbursed by the national election commission. This paper is to review the conflicting visions surrounding Citizens United decision in the United States and apply them to the situation in Korea as it needs more open discussion about this sensitive, but unavoidable issue. What freedom of speech means in a given political society would largely be determined by the history and wording of that constitution. To what extent courts defer to the political determination of the legislative branch also would be decided by the institutional integrity they have built up and prospective response from the ruled. Nonetheless, as Korea has been continuously moving towards a more democratic society, coordination and consensus-building through the political process is becoming more important. Corporations should not be cast away simply because of the possible corruption. Rather, considering the economic importance of corporate entities in national economy, they should be able to participate in the political process and share the cost pertinent thereto in an open and candid manner. I suggest Korean laws be changed to allow corporate contributions and expenditure up to a certain limit like an individual. As a control mechanism, they should be disclosed and reviewed by shareholders, however. Any violators of the rules would be criminally sanctioned. If political consensus needs more time, it might not be too early to discuss this issues more maturely and practically among scholars and politicians.

How Companies Influence Elections - Political Campaign Spending Patterns and Oversight at America’s Largest Companies

Investor activists have waged a campaign to increase corporate political spending disclosure and board oversight since 2004, through shareholder resolutions filed for consideration at corporate annual meetings. In 2010, average support for these resolutions reached 30 percent - an unusually high level for dissident proposals. This report examines corporate political spending governance practices at S&P 500 companies, exploring the extent to which they conform to suggested best practices outlined in a handbook released in November 2010 by the Conference Board and the Center for Political Accountability, a Washington, DC-based based advocacy group that has led the disclosure campaign. The study finds that board oversight and voluntary spending disclosure to investors remains limited. Further, companies rarely reveal policies and practices relating to independent expenditures from the corporate treasury, an avenue for political spending that was expanded substantially by the Citizens United decision.

Making Sense with Democratic Dollars: How Congress Can Use the Disclose Act to Incentive Small Donor Participation After Citizens United

In this paper I argue that the Congressional response to Citizens United - the DISCLOSE Act - presents an opportunity to do more than just play defense; if modified just slightly the DISCLOSE Act can be a powerful offensive tool. One small change in the bill would start encouraging smaller donor participation by providing incentives to all non-profit groups that voluntarily agree to contribution limits to their Campaign-Related Activity Accounts. I first lay out what I see as the money in politics problem. I then discuss the effects of the Citizens United ruling on the current landscape and how the DISCLOSE Act aims to mitigate them. I propose a change in the DISCLOSE Act that would keep the small donor trend alive by providing incentives for all non-profit groups such as unions, advocacy groups, and trade organizations, to voluntarily limit their contributions. These incentives would be bundled together and labeled “democratic dollars.” I explain how this label will provide a powerful heuristic in helping voters sort through the cacophony of electioneering communications that flood the airwaves while also respecting First Amendment rights. Focusing on contribution limits for electioneering communications makes all independent election expenditures more democratic by laundering larger contributions through participatory channels. I conclude by evaluating the constitutionality of this proposal in light of doctrine that upholds a similar scheme in the tax code - where organizations get the benefits of §501(c)(3) status in exchange for agreeing not to engage in certain political activities.

Economics Trumps Politics; Market Trumps Democracy: The US Supreme Court's Decision on Campaign Financing

In the appeal of Citizens United v. Federal Election Commission 2009, the US Supreme Court decided on 29 January in a vote of 5 : 4 to overturn the existing Bipartisan Campaign Reform (McCainFeingold) Act of 2002 (BCRA). The BCRA is a federal law that prohibits corporations and unions from using their general treasury funds to make independent expenditures for speech that is an ‘electioneering communication’ or for speech that expressly advocates the election or defeat of a candidate. Citizens United (CU), a non-profit corporation, released a documentary that was critical of then Senator Hilary Clinton, a candidate for her party’s presidential nomination. Assuming that the documentary would run on cable television 30 days before the election, CU produced advertisements. Paragraph 441b of the BCRA defines an ‘electioneering communication’ as ‘any broadcast, cable, or satellite communication’ that ‘refers to a clearly identified candidate for Federal office’ and is made within 30 days of a primary election. CU, the appellant in the dispute, argued that the documentary was unconstitutional in terms of Paragraph 441b and to the reporting and disclosure requirements of the BCRA. CU sought an injunction on the grounds that the documentary was not an ‘electioneering communication’ because it was not publicly distributed. Perhaps, more importantly, CU held that the case could not be resolved on narrower grounds without chilling political speech, which runs counter to the First Amendment. The Court had to consider the continuing effect of the speech suppression upheld in Austin v. Michigan Chamber of Commerce. This was the case in which the Supreme Court held that the Michigan Campaign Finance Act, which prohibited corporations from using treasury money to support or oppose candidates in elections, did not violate the First and Fourteenth Amendments. The Court upheld the restriction on corporate speech based on the notion that ‘[c]orporate wealth can unfairly influence elections’, and the Michigan law still allowed the corporation to make contributions from a segregated fund. The result of the Court’s decision was to overrule Austin. Chief Justice Roberts, with whom Justice Alito agreed, wrote: The Government urges us in this case to uphold a direct prohibition on political speech. It asks us to embrace a theory of the First Amendment that would allow censorship not only of television and radio broadcasts, but of pamphlets, posters, the Internet, and virtually any other medium that corporations and unions might find useful in expressing their views on matters of public concern. Its theory, if accepted, would empower the Government to prohibit newspapers from running editorials or opinion pieces supporting or opposing candidates for office, so long as the newspapers were owned by corporations – as the major

Campaign Finance Laws and Political Efficacy: Evidence from the States

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