Can “Letting in Sunlight” Lead to Accidental Sunburn? The Unintended Consequences of Campaign Finance Reform on the Financing of U.S. Presidential Candidates

Abstract

Abstract

Changes in campaign finance or other electoral laws often have unintended consequences. We demonstrate this effect by examining how the 2002 Bipartisan Campaign Reform Act helped alter the makeup of small, medium, and large dollar donors in the critical period known as the “invisible primary” before the Iowa Caucuses. The original concerns were that a few large dollar contributors would play a disproportionate role in funding bids and that candidates who had the ability to attract these large contributions would gain an unfair advantage. To measure the effects on contributor behavior, we examine candidate reports filed with the Federal Election Commission during the 2000–2016 presidential preprimaries. We find the impact and number of small contributions increased significantly following the passage of the 2002 legislation while the midsize and large contributions decreased. More importantly, this shift occurred well in advance of the Supreme Court's rulings prior to the 2012 contest. While this trend does have some positive aspects, we argue the decline of the midsize contributor will impact how nomination hopefuls fund their campaigns and eventually may undermine the political parties as entities themselves that are independent of the well-funded super PACs that have arisen in recent years.