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Campaign Finance Laws and Political Efficacy: Evidence from the States

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Campaign Finance Laws and Political Efficacy: Evidence from the States 5992_03_p23-39 1/26/06 10:26 AM Page 23 ELECTION LAW JOURNAL Volume 5, Number 1, 2006 © Mary Ann Liebert, Inc. Campaign Finance Laws and Political Efficacy: Evidence from the States DAVID M. PRIMO and JEFFREY MILYO A failure to regulate the arena of campaign finance allows the influence of wealthy individuals and corporations to drown out the voices of individual citizens . causing the public to become disillusioned with and mistrustful of the political system. —Jacobus v. Alaska1 O CAMPAIGN FINANCE REGULATIONS affect eral elections and average trust in government Dhow citizens view their government? This at the national level. In fact, Freedman, Franz, question is both theoretically important and and Goldstein (2004) find that campaign ad- policy-relevant. A central argument for more vertising (and, therefore, campaign spending) restrictive campaign finance laws at both the increases interest levels, knowledge, and state and federal levels is that tighter rules turnout, suggesting that spending may in fact will restore trust in the government and make be a net positive for democracy.2 citizens once again feel that they can affect Given the central role that trust and efficacy the political process. Supreme Court decisions play in scholarly and policy discussions about upholding the constitutionality of campaign campaign finance reform, it is surprising that finance regulations acknowledge that the main- no study has directly examined the connection tenance of confidence in government can some- between existing campaign finance laws and times override free-speech concerns. Yet the how citizens view their government.3 Never- purported link between campaign finance law theless, institutional reforms are widely thought and perceptions of government has never been to be a potential policy lever for strengthening established systematically. In fact, there is good democracy. For example, Hibbing and Theiss- reason to doubt the existence of such a link, as both Primo (2002) and Coleman and Manna (2000) argue that there is little or no relation- 1 338 F.3d 1095, 1107 (9th Cir. 2003). ship between total campaign spending in fed- 2 This point is also made by Coleman and Manna (2000). 3 One reason for the dearth of such evidence is that until recently, most rigorous academic work on campaign fi- nance has been limited to attempts at measuring the ef- David M. Primo is Assistant Professor of Political Science, fect of either campaign spending on electoral outcomes University of Rochester. Jeffrey Milyo is Associate Pro- or campaign contributions on policy outcomes. (On the fessor, Department of Economics and the Truman School effects of campaign spending and electoral outcomes, see of Public Affairs, University of Missouri at Columbia. Pre- especially Levitt [1994] and Gerber [1998]; on the effects vious versions of this paper were presented at the 2003 of campaign contributions on roll-call votes, see especially Annual Meeting of the American Political Science Asso- Stratmann [1998], Bronars and Lott [1998], and Levitt ciation and 2003 Annual Meeting of the Midwest Politi- [1998].) In addition, these efforts focus on the federal level; cal Science Association. The authors thank Barry Burden, since federal campaign finance laws have been relatively Dick Niemi, the editors, and anonymous reviewers for stable over the past three decades, there has been little helpful comments. Thanks also to Matt Jacobsmeier and opportunity for systematic analysis regarding the impact Matt Stiffler for research assistance. of these laws. 23 5992_03_p23-39 1/26/06 10:26 AM Page 24 24 PRIMO AND MILYO Morse (1995) discuss possible reforms within a law is constitutional. The authors go on to note Congress that might increase public support that the evidence brought to bear in court cases for the institution. These include term limits tends to be of two forms: (1) anecdotal (e.g., (which have since been ruled unconstitutional news accounts) or (2) data showing that the for Congressional offices), a balanced budget public is distrustful of government and would rule, and what the authors term “serious” cam- like to see more campaign finance reform.5 paign finance legislation (Hibbing and Theiss- What is missing, as we show below, is evidence Morse 1995, 62–83). Weber argues that if sev- that reform will lead to improved trust in gov- eral state-level reforms are implemented, ernment or perceptions of political efficacy. including the creation of independent com- Two recent studies (Goidel, Gross, and missions to oversee campaign finance in the Shields 1999; Coleman and Manna 2000) ex- states, then “the result will be a restoration of amine a related issue: the relationship between public confidence in state legislatures” (Weber spending in U.S. House elections and individ- 1999, 625–626). Goidel, Gross, and Shields ual survey responses to NES questions on effi- (1999, 12) also argue that campaign finance re- cacy or knowledge. These authors reach nearly forms will “improve the quality of American opposite conclusions, with Coleman and democracy,” though none of these authors ex- Manna finding some evidence that campaign plicitly test the hypothesis that campaign fi- spending may improve knowledge and per- nance laws are related to Americans’ percep- ceived efficacy, and with Goidel et al. finding tions of their political efficacy.4 Despite these some evidence to the contrary. These disparate positives, Gross and Goidel claim (but do not findings may be attributable to the different demonstrate) that reform may also have a neg- methodological approaches taken by the au- ative side: thors. For example, Goidel et al. do not exam- ine the potential endogeneity of campaign . the consideration of reform tem- spending and efficacy or knowledge, while porarily appeased an increasingly cynical Coleman and Manna do.6 and alienated public while feeding the The public debate over state and federal media establishment with sound bites on campaign finance reform has likewise gener- the evils of money. But, in the long run, it ated frequent and unsupported assertions that undoubtedly increased public cynicism and such reforms will restore faith in democracy. added to public alienation, even as it pro- For example, Common Cause president Don tected individual members of Congress Simon, commenting on the 2002 Bipartisan who could claim to be in favor of reform Campaign Reform Act (BCRA), stated, “I without ever having to abide by its provi- think it makes a huge difference that the world sions (Gross and Goidel 2003, ix, empha- of soft money has come to an end. The law sis added). took a half a billion dollars off the political table, and it makes a whole lot of difference A few studies have attempted to empirically in the way the process works, and for the con- connect campaign finance and views on gov- ernment. Grant and Rudolph (2004) adopt an experimental approach to study the founda- 4 A recent review of the literature on money in American tions of public support for campaign finance re- politics and its lessons for policy does not address whether campaign finance laws influence political effi- form, especially the tension between the values cacy or trust, underscoring the lack of evidence on this of liberty and equality. Persily and Lammie question (Mann 2003). (2004), using descriptive data and indirect tests, 5 There is reason to think that news accounts, by focus- ing on extreme examples of spending or corruption, may conclude that the likely link between federal in fact be part of the problem. See Ansolabehere, Snow- campaign finance law and trust in government berg, and Snyder (2005). is weak. Like Primo (2002), they point out that 6 Coleman and Manna employ an instrumental variables campaign finance law is unique in jurispru- regression to estimate the effect of campaign spending; however, their instruments, which include incumbent dence because public opinion is deemed di- and challenger quality and lagged vote share, may also rectly relevant for determining whether or not be endogenous. 5992_03_p23-39 1/26/06 10:26 AM Page 25 CAMPAIGN FINANCE LAWS AND POLITICAL EFFICACY 25 fidence the American people have in the sys- This line of reasoning is reiterated in Nixon v. tem” (Vlahos 2003). But perhaps no example Shrink Missouri Government PAC, 528 U.S. 377 is as telling as when Senator John McCain (R- (2000), although the majority opinion also ex- AZ) took to the Senate floor to argue in sup- plicitly notes the absence of evidence that cam- port of reform: paign finance laws influence public trust in government.7 The Ninth Circuit Court of Ap- The Senator from Kentucky [Mitch Mc- peals has also referenced the presumed con- Connell] said the other day that there is nection between campaign finance reform and no evidence, no polling data, no indication trust in government (see the epigraph to this at all that the people’s estrangement from Introduction). Congress would be repaired by campaign Most recently, in McConnell v. FEC, 540 U.S. finance reform. He is correct, there is no 93 (2003), the Supreme Court repeatedly ap- such evidence (Congressional Record 1999). pealed, often in reference to past decisions, to the “eroding of public confidence in the elec- McCain then went on to explain that he had a toral process through the appearance of cor- “hunch” that reform would improve citizens’ ruption” as a justification for limits on large views of the Congress. But if there is no evi- contributions to political parties (540 U.S., at 95, dence that campaign finance reforms improve 136). Limiting the appearance of corruption is trust and political efficacy, why do proponents also deemed to be of “ ‘almost equal’ impor- of reform frame their arguments in this man- tance” (540 U.S., at 96, 143) as limiting actual ner? The answer is found in the rationale pro- corruption for preserving the “integrity of the vided by the Supreme Court for permitting re- electoral process” (540 U.S., at 119).
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