Some aspects of the political economy of election campaign contribution laws

This essay constructs a very general model of an election campaign contributor's decision problem. This model permits one to assess the effects of three variables on the campaign contribution decision in two-candidate elections. These variables are: first, the level of the statutory contribution limit; second, the presence of a statute enforcing disclosure of the source and amount of each contribution; and third, the contributor's subjectively estimated probability that each of the two candidates wins. The findings from the model lead to the conclusions that statutory limits and disclosure work against the candidate whom the contributor believes to be trailing. Moreover, as the statutory contribution limit becomes smaller, the leading candidate's perceived electoral margin needed to receive all of the contributor's budget diminishes to zero. Hence, the Supreme Court majority's decision in Buckley v. Valeo, that the 1974 Federal Election Campaign Act does not discriminate invidiously against challengers of incumbents, as well as minor party candidates, is brought into serious question. Copyright Martinus Nijhoff Publishers b.v. 1979