The Political Economics of Campaign Finance

By Milyo, Jeffrey | Independent Review, Spring 1999 | Go to article overview

The Political Economics of Campaign Finance

Milyo, Jeffrey, Independent Review

The public debate over campaign-finance reform is often framed as necessitating an unfortunate trade off between the liberal ideals of free speech and association on one side and the democratic ideals of equal representation and participation on the other. But despite frequent calls for dramatic action, the terms of the tradeoff are not well-understood. In this regard as in others, the study of the political economics of campaign finance is more notable for its faults and oversights than for its contributions. Scholarly work on campaign finance provides little basis for a cost-benefit analysis of proposed campaign-finance reforms.

First, no one has analyzed systematically the effects of campaign-finance regulations on freedom of speech or association. Are such regulations enforced in an evenhanded or a haphazard manner? Are they enforced at all? How do campaign-finance regulations affect the nature of citizen participation and public debate? Are corporate, labor, and other interest groups equally constrained? Are organized interest groups less hampered by regulation than more ad hoc coalitions? It is difficult to evaluate the desirability of either current laws or proposed reforms when the potential costs of various policies have been completely ignored by scholars and policy makers alike.

Second, we do not know much about the supposed benefits of campaign-finance regulations. Despite a plethora of research on how money affects either electoral or policy outcomes, the quality of those studies is often wanting. Recently, important methodological advances have been made in the empirical analysis of the electoral consequences of campaign spending, although no strong consensus has been reached on the importance of money in elections (e.g., Grier 1989; Levitt 1994; Ansolabehere and Snyder 1996b; Erickson and Palfrey 1998; Gerber 1998; Milyo 1998a). In addition, several admirable empirical studies of campaign contributions focus on the allocation of funds by political action committees (PACs) to congressional incumbents (e.g., Snyder 1990, 1992 and 1993; Grier and Munger 1991a, 1991b; Grier, Munger, and Roberts 1994). Though not unimportant, PAC contributions represent a small and declining share of total campaign contributions--down to about 15 percent of all contributions to federal candidates in 1996. Further, no consensus exists in the research literature as to whether campaign contributions are the functional equivalent of bribes (Lowenstein 1996; Milyo 1998b). Finally, several relevant insights from the theory of social choice have not been applied to the question of how campaign finance affects the democratic process.

In this article I deal primarily with the last two questions: Are campaign contributions interested, and if so, should we care? I argue that contrary to the apocalyptic rhetoric of some reformers, interested money plays a less deleterious role in American politics than is commonly held.

The Conventional Wisdom

The corrupting influence of money in politics is a staple of media pundits, public-interest advocates, and even many politicians. The basic claim is that interested money perverts the democratic process in three ways: (1) campaign contributions buy legislative favors, (2) campaign expenditures buy elective office, and (3) popular disgust with the dominant role of money in politics causes ordinary citizens to withdraw from participation in the political process. Consequently, the current system of campaign finance is thought to undermine the twin democratic principles of representation and participation.

It is not difficult to find lurid examples and descriptive statistics consistent with the claim that money is the driving force in American politics (Stern 1991, 1992; Morris and Gamache 1994; Makinson and Goldstein 1996). For example, usually in electoral contests the candidate who spends more money wins. Further, when incumbent officeholders run for reelection, they usually spend far more than their challengers, and they usually win reelection easily. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Cite this article

Cited article

Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Political Economics of Campaign Finance


Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

    New feature

    It is estimated that 1 in 10 people have dyslexia, and in an effort to make Questia easier to use for those people, we have added a new choice of font to the Reader. That font is called OpenDyslexic, and has been designed to help with some of the symptoms of dyslexia. For more information on this font, please visit

    To use OpenDyslexic, choose it from the Typeface list in Font settings.

    OK, got it!

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search


    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.