Kickbacks and Limits on Campaign Donations

• In Event: Clientelism and Political Behavior

Abstract

How do campaign contribution limits alter the influence of donors over elected officials? We propose a model to explore this question and test its implications using a rich dataset of campaign donations and public contracting from Colombian municipalities. Using a regression discontinuity design that exploits institutional rules determining contribution limits based on population thresholds, we find that looser campaign limits reduce the number of donors per candidate and increase the average donations received by the winner of the election. Moreover, we document that donors who contributed to the winner of the election are more likely to receive contracts from the supported candidate upon taking office. These patterns suggest that looser campaign limits increase the influence of fewer individuals in campaigns. A higher influence of donors over elected officials is also reflected by the fact that looser limits are associated with more kickbacks for each donor, which are awarded in a more discretionary way.

Authors

• Saad Gulzar, Stanford University

• Miguel R. Rueda, Emory University

• Nelson Alejandro Ruiz, University of Oxford