Individual donors prefer to support ideologically extreme candidates; relaxation of contribution limits from political action committees lead to the selection of more moderate legislators

Ideological Donors, Contribution Limits, and the Polarization of American Legislatures. Michael J. Barber. The Journal of Politics, Volume 78, Number 1, Jan 2021. https://www.journals.uchicago.edu/doi/abs/10.1086/683453

Abstract: This article demonstrates that limits on campaign contributions—which alter a candidate’s ability to raise money from certain types of donors—affect the ideologies of legislators in office. Using an original data set of campaign contribution limits in some US states over the last 20 years, I exploit variation across and within states over time to show that higher individual contributions lead to the selection of more polarized legislators, while higher limits on contributions from political action committees (PACs) lead to the selection of more moderate legislators. Individual donors prefer to support ideologically extreme candidates while access-seeking PACs tend to support more moderate candidates. Thus, institutional changes that limit the availability of money affect the types of candidates who would normally fund-raise from these two main sources of campaign funds. These results show that the connection between donors and candidates is an important part of the story of the polarization of American politics.