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Corporate donations are good for political moderation

Summary:
This article demonstrates that limits on campaign contributions—which alter a candidate’s ability to raise money from certain types of donors—affect the ideologies of legislators in office. Using an original data set of campaign contribution limits in some US states over the last 20 years, I exploit variation across and within states over time to show that higher individual contributions lead to the selection of more polarized legislators, while higher limits on contributions from political action committees (PACs) lead to the selection of more moderate legislators. Individual donors prefer to support ideologically extreme candidates while access-seeking PACs tend to support more moderate candidates. Thus, institutional changes that limit the availability of money affect the types of

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This article demonstrates that limits on campaign contributions—which alter a candidate’s ability to raise money from certain types of donors—affect the ideologies of legislators in office. Using an original data set of campaign contribution limits in some US states over the last 20 years, I exploit variation across and within states over time to show that higher individual contributions lead to the selection of more polarized legislators, while higher limits on contributions from political action committees (PACs) lead to the selection of more moderate legislators. Individual donors prefer to support ideologically extreme candidates while access-seeking PACs tend to support more moderate candidates. Thus, institutional changes that limit the availability of money affect the types of candidates who would normally fund-raise from these two main sources of campaign funds. These results show that the connection between donors and candidates is an important part of the story of the polarization of American politics.

That is from a new paper by Michael J. Barber.  Via Matt Grossman.

The post Corporate donations are good for political moderation appeared first on Marginal REVOLUTION.

Tyler Cowen
Tyler Cowen is an American economist, academic, and writer. He occupies the Holbert C. Harris Chair of economics as a professor at George Mason University and is co-author, with Alex Tabarrok, of the popular economics blog Marginal Revolution. Cowen and Tabarrok have also ventured into online education by starting Marginal Revolution University. He currently writes the "Economic Scene" column for the New York Times, and he also writes for such publications as The New Republic, the Wall Street Journal, Forbes, Newsweek, and the Wilson Quarterly.

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