Timing of Contributions in State Legislatures

David W. Prince
University of Kentucky
Department of Political Sciencedwprin0@uky.edu

Paper prepared for presentation at the annual meeting of the Southern Political Science
Association, New Orleans, Louisiana January 8-11, 2004.

Introduction
Campaign finance is a topic of contemporary importance in the American
political system. Many citizens feel they have no voice in a political system controlled by
special interests with deep pockets. Senator John McCain in the 2000 presidential
primary season placed campaign finance reform as the centerpiece of his campaign. In his
speech on September 27, 1999 in Nashua New Hampshire to announce his candidacy forpresident McCain stated: “If we are to meet the challenges of our time, we must take thecorrupting influence of special interest out of politics.” McCain has continued to serve as
the primary spokesperson for campaign finance reform and has been the key actor in the
recent passage of campaign finance reform with its centerpiece of banning soft money.
Campaign finance is a topic of interest to many political researchers. The
literature covers a wide spectrum of issues. However, the majority of this research has
focused on the national level with little attention paid to the states. This research serves toaddress campaign finance at the state level, which has been neglected within theliterature. There are several compelling reasons why there is a need to address campaign
finance at the state level. First, a state level examination will help provide a greater
understanding of how legislative structure affects campaign contributions. For example,
the United States Congress is a professional legislative body occupied by career
politicians. On the other hand, many states have amateur legislatures that have little incommon with the national government. A state level examination will allow us to gain
some purchase on how these structural differences impact contribution decisions.
Additionally, the variety of policy and political context within the states allows us to gain
more empirical leverage on questions of campaign finance than possible at thecongressional level (Mooney 2001) and more weight can be given to theories at thenational level when they are replicated in the states (Hamm and Squire 2001).
State legislative elections have a much lower profile than national elections,
therefore, it is reasonable to assume that given this low profile among the public, money
could play a greater role influencing voting behavior since legislators do not have to be as
concerned with public opinion. Additionally, the states operate under a variety ofdifferent campaign finance laws; thus, a state level analysis will allow a better
understanding of the impact of various campaign laws.
Within the discipline, it has been suggested that there are two main motivations
for campaign contributions, so-called particularistic contributors give in the hope of
influencing legislation (Austen-Smith 1995, 1998; Ben-Zion and Eytan 1974; BoxSteffensmeier and Dow 1992; Cox and Munger 1999; Chappell 1982; Jones and Hopkins
1985; Hendrie, Salant and Makinson 2000; McAdams and Green 2000; Morton and
Cameron 1992; Snyder 1990; Strattmann 1998; Welch 1977 and 1980). Universalistic
contributors, on the other hand give in the hope of affecting electoral outcomes (Fuchs,
Adler and Mitchell 2000; Magee, Brock and Young 1989; Morton and Cameron 1992;
Mueller 1989; Mutz 1995; McAdams and Green 2000; Poole and Romer 1985; Sabato
1985; Snyder 1990; Welch 1974 and 1980). This research will hopefully provide agreater insight into the motivations of contributors and the relevance of each of these two
approaches through an analysis of contributions in twenty-one states.

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The History of Campaign Finance in Federal Elections
Campaign finance has received a great deal of attention in the media recently;
however, the issue has been a permanent part of the political landscape for several
centuries. The first effort to regulate campaign finance came in 1867 with passage of theNaval Appropriations Bill. This legislation attempted to prohibit officers and employeesof the government from soliciting money from naval yard workers. This legislation was
furthered extended in 1883 in the Civil Service Reform Act when the provisions of theNaval Bill were applied to all federal civil service workers. These bills were a big step
forward in the regulation of campaign finance because prior to the legislation workers
often had to give to campaigns in order to keep their jobs.
The next major step in advancing campaign finance reform came in 1907 withpassage of the Tillman Act. The act attempted to prohibit corporations and national
charted banks from making contributions directly to federal candidates, however, thelegislation proved to be largely ineffective due to weak enforcement methods set forth in
the legislation. The Federal Corrupt Practices Act of 1910 was another in a series oflargely ineffective attempts to regulate campaign finance. The act attempted to establish
disclosure requirements for U.S. House candidates and in 1911 this act was extended toincluded Senate candidates and expanded to include expenditure limits for congressional
candidates. This legislation once again proved largely ineffective due to the lack ofmechanisms for verification and enforcement.
In 1925 the Federal Corrupt Practices Act was revised; but once again legislation
would be routinely ignored. The act attempted to revise previous campaign reform
legislation concerning spending limits and disclosure. Since the power of enforcement
resided in Congress, the Act was often ignored. It was not until 1967 that Clerk of theHouse former Congressman W. Pat Jennings collected campaign finance reports for the
first time. However, his list of violators was ignored by the Justice Department.
In 1940 the Hatch Amendments were passed to extend previous legislation. The
amendments established a limit of $5000 per year on individual contributions to a federal
candidate or political committee. An individual could, however, give $5000 to multiplecommittees working for the same candidate. Additionally, the Hatch amendments
extended campaign finance law to cover primary as well as general elections andprohibited contributions to federal candidates from individuals and businesses working
for the federal government. In 1943 the Smith-Connally Act extended to unions theprohibition on contributions to federal candidates that already existed for corporations
and interstate banks.
In 1944 the first political action committee was formed by the Congress ofIndustrial Organizations to raise money for the re-election of President Roosevelt. The
PAC money came from voluntary contributions from union members and therefore was
not illegal under the Smith-Connally Act that prohibited money going to candidates fromunion dues. The Taft-Hartley Act of 1947 made the ban on contributions to federal
candidates from unions, corporations and interstate banks permanent and extended theprohibitions to include primary elections.
Until 1971, the Corrupt Practices Act served as the basis for campaign financelaw; however, with passage of the Federal Election Campaign Act in 1971 a newframework for the regulation of campaign financing was established. This act required2

full and timely disclosure of contributions, set limits on media advertising, establishedlimits on contributions from candidates and their families, allowed unions andcorporations to solicit voluntary contributions, and allowed union and corporate treasury
money to be used for overhead in operating political action committees.
The 1971 Revenue Act created a public campaign fund for eligible presidential
candidates through a voluntary one-dollar check off on federal income tax. Additionally,
the act provided for a $50 tax deduction or a $12.50 credit (later raised to $50) for
contributions to state, local or federal candidates. These provisions, however, have since
been eliminated.
The most significant campaign reforms came in the aftermath of the Watergate
scandal. This legislation serves as the basis for most of our federal campaign finance law
today. The Federal Campaign Act Amendment of 1974 provided matching funds forpresidential primaries, public funds for presidential nominating conventions, set spending
limits for presidential and congressional primaries and elections, created a $1000
individual per election contribution limit and a $5000 PAC limit. Additionally, thelegislation abolished limits of media advertising and created the Federal Election
Commission.
Provisions of the1974 federal Campaign Act of 1974 were challenged in the
courts as being an unconstitutional violation of free speech. The 1976 decision Buckley
v. Valeo upheld disclosure requirements, limits on individual contributions, voluntary
public financing, and the President’s authority to appoint commissioners to the Federal
Election Commission as constitutional. However, the court ruled that limits on candidate
expenditures were unconstitutional unless the candidate accepts public financing and that
it was unconstitutional to place limits on personal and “independent” expenditures.
In 1976, in the wake of the Buckley decision, Congress reconsidered the 1974
Federal Campaign Act and sought to bring the law in line with the Supreme Court
decision. Amendments to the 1974 act limited individual contributions to national parties
to $20,000 per year, and individual contributions to PAC’s to $5000 per year. In 1979
additional amendments increased the in-kind contributions from $500 to $1000, raised
the threshold for reporting contributions from $100 to $200, prohibited the FEC fromperforming random audits, and allowed state and local parties to spend unlimited
amounts on campaign materials used by volunteers and on voter registration and get-outthe-vote campaigns.
State Campaign Finance Reform
Campaign reform has not been restricted to the national level. By 1980 moststates required some sort of candidate disclosure, half of the states placed limits oncontributions and 16 states had some type of public financing.1 Since 1990 the majorityof states have reformed their campaign finance laws in response to rising campaign cost,
underfunded challengers, the increased influence of large donors, and the growing
influence of independent expenditures. The innovative approaches taken by the statessuch as strict contribution limits, spending ceilings and public financing of campaigns
serve as models for national reform. However, like in the case of federal law many of the1

For an overview of campaign finance reform in the states see Alexander (1976); Jones (1981, 1986,
1991); Neal (1992); Herrmann and Michaelson (1994); Malbin and Gais (1998).

3

laws enacted by the states have undergone scrutiny by the courts and have in many cases
been declared to be unconstitutional. The response by the courts has often led to moreunique innovations such as providing free broadcast time to candidates. These new
innovations have broadened the campaign finance debate to include a whole new way of
thinking about campaign financing.
In 1991 ten states passed laws establishing or reducing contribution limits.
Additionally, from 1992 to 1996 twenty-three states and the District of Columbia revised
their campaign finance laws including some states that made major changes in their
existing systems.2 In 1980 twenty-three states had limits on individual contributions
while sixteen states had limits on PAC contributions. The number of states withindividual contributions increased to thirty-four states by 1996. Additionally, by 1996
thirty-two states imposed limits on PAC contributions. The increase attention to
campaign reform legislation by legislators has been accompanied by an interest ofscholars to determine the impact of enacted legislation. The elapse of time since thepassage of many reform laws has allowed scholars to begin to access the impact of
campaign reform. In the next section I will examine some of the findings that haveattempted to understand the consequences of reform efforts as well as the foundation ofwhich this research was based.
Literature Review
The literature on campaign finance can be divided into three basic areas ofinquiry-- studies that examine the behaviors of contributors (for example see Brown,
Hedges, and Powell 1980; Heard 1960; Jacobson and Kernell 1993; Pomper 1989), thosethat look at the actions of recipients (for example see Grenzke 1989; Jackson 1988;
Schlozman and Tierney 1986; Sorauf, 1992) and studies that examine the impact ofcontribution limits and campaign reforms such as public financing of campaigns (forexample see Breaux and Gierzynski 1998; Moncrief and Patton 1993; Goidel and Gross
1994; and Stonecash 1990). This body of literature addresses major questions of why
money is given, to whom is money given, the impact of money received and the impact
of changes to the current campaign finance system.
First, I plan to examine the literature on questions surrounding campaign financelaws and spending. This section will examine the questions of who spends money incampaigns and the impact of attempts to control spending. Second, I will examine
literature addressing the actions of recipients. This section will address the question ofwhat is the impact of money given to candidates and legislatures: Are contributors
successful in changing legislative votes? Finally, I will review the literature surrounding
the actions of contributors. This literature addresses the questions of whom money isgiven to and the expectations of contributors that form the basis for their donations.
Campaign Finance Laws and Spending

2

Between 1992 and 1996 California, Colorado and Kentucky passed comprehensive reform packages.
Maine and Nebraska established public financing for state elections and Minnesota and Hawaii revised
their public financing programs.

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The impact of campaign finance laws and spending has received a great deal ofattention by scholars. Campaign spending is an issue of importance as it impacts thequality of democracy of the United States. Coleman and Manna (2000) examine U.S.
House elections from 1994 to 1996 and conclude that spending results in better-informed
citizens and does not damage public trust or involvement. They conclude that spending
has positive affects on democracy through increased public understanding of thecandidates and the issues. These findings are in contrast, however, to other scholars thatfind that spending does not necessarily result in a better-informed electorate (Goidel,
Gross, Shields 1999). Additionally, Franklin (1991) concludes that it may be more in theinterest of the challenger than the incumbent to confuse voters about the incumbent. Thisfinding reveals that greater spending results in a less accurate portrayal of the incumbent
and therefore this is not good for democracy.
Adamany (1969) was among the first to address the question of spending levels instate elections through his examination of elections in Wisconsin. While, he found thatspending levels in dollar terms is not very high his primary concern was spending
inequality among candidates. Adamany (1969) found that many potential candidates
could not raise the money to be able to compete effectively. Other scholars such as Neal
(1992), Hogan (1999), and Breaux and Gierzynski (1998) also suggest these concerns.
The difference between incumbent and challenger spending has been the catalyst for
many calls for campaign finance reform to level the playing field between incumbents
and challengers.
Jacobson has conducted the seminal works in campaign finance on the effects ofspending on election outcomes. Campaign finance laws have a great impact on interest
group contributions. Jacobson (1978, 1980, 1985, 1990) and Abramowitz (1988, 1991)
argue that incumbents receive little benefit from campaign expenditures since they are
already well known by the voters. This evidence has been used to suggest that campaign
contribution limits would hurt challengers with little name recognition. Glantz,
Abramowitz, and Burkart (1976) found similar findings for the California State Assembly
and, the differences in the effects of incumbent and challenger spending was confirmed
by Olson (1983) in Texas state legislative elections and Giles and Pritchard (1985) in
Florida as well as other scholars such as Caldeira and Patterson (1982); Tucker andWeber (1987) and multiple state studies by Gierzynski and Breaux (1991) and Cassie andBreaux (1998). These findings are generally explained in terms of the arguments thatincumbents are most likely to spend money when they are most threatened thus providing
an explanation for the difference in the impact of incumbent and challenger spending.
However, other scholars argue that incumbent expenditures are important whenthe quality of the challenger is considered in the equation (Green and Kranso 1988, 1990:
Goidel, Gross and Shield 1999; Goidel and Gross 1994; Thomas 1989; Erikson and
Palfrey 1998, 2000; Gerber 1998). As such, these scholars argue that contribution limits
may actually increase competition and that equal spending levels may increase challenger
success. Campaign spending by challengers has a positive effect on challenger vote share,
they find that incumbent spending also has a positive, although smaller, impact on
incumbent vote shares (Grier 1989; Green and Krasno 1988; Levitt 1984).
Evidence of the importance of spending to the vote share in federal elections
clearly is mixed. Much the same can be said of research on state level elections. Jacobson(1978) argument was supported at the state level by Welch (1976). Additionally, Tucker

5and Weber (1987) conclude that party strength is more important than candidate spending
in determining vote share. However, Owens and Olson (1977), in their study ofCalifornia legislative elections, conclude that spending is the best predictor of the voteand that incumbency and party strength were only of secondary importance. Caldeira andPatterson (1982) confirmed these findings in California and Iowa thus providing someevidence that the previous findings were not exclusive to California. However, thesestudies suffered from the lack of generalizability. Gierzynski and Breaux (1993) helped
to address this problem through an examination of twelve states. They concluded thatpartisan influences on a candidate’s vote share were stronger in some states than in others
and that contributions were more important in those states with weak partisan influences.
In addition to examining the direct effects of spending on vote shares, a few
studies have addressed the question of how laws affect a candidate’s ability to raisemoney. For the most part these studies have been confined to the effects of spending(Abramowitz 1991; Goidel and Gross 1994, 1996; Goidel, Gross and Shield 1999; Greenand Krasno 1988; Gross, Goidel, and Shields 1997; Jacobson 1980) and the sources offundraising (Sorauf 1988, 1992) at the national level. Sorauf (1992) finds thatincumbents learn to exploit the PAC system to raise large sums of money that far exceed
challengers. Incumbents, therefore are able to build “war chests” to deter challengers
from running against them (Box-Steffensmeier 1996). Additionally, Abramowitz (1991)
concludes that the decrease in electoral competition can be contributed to a decrease in achallenger’s ability to raise money. The enactment of campaign finance laws to reduce
spending in elections has resulted in the unintended consequence of inhibiting
challenger’s ability to raise money and, thereby, decreasing their success sincechallengers have a greater need for money than incumbents to get their message out tothe public.
The impact of contribution limits on spending is not completely understood in theliterature. Campaign contribution limits are often enacted with the hope of decreasing
spending in elections. However, limits often do not have their intended effect. A decreasein contribution limits may be offset by an increase in the number of contributors giving to
the campaign. Changes in contribution limits do not necessarily resort in less spending,but in the acquisition of donations from a broader spectrum of sources.
Additionally, even if a contribution limits exist, spending in campaigns will
increase if a highly qualified challenger enters the race thus making the election morecompetitive (Box-Steffensmeier and Dow 1992; Dow 1994; Hogan 2000; Gross, Shields,
and Goidel 2002). Hogan (2000), through an examination of a variety of context forvarious candidate and state-level factors, concludes that campaign contribution limits
have been effective in reducing spending. However, Hogan (2000) also notes that limits
would have been more successful if interest groups had not found alternative ways offunneling money to candidates. These findings are in contrast to other scholars that havenoted that contribution limits do not necessarily reduce overall spending. Gross, Shieldand Goidel (2002) find that contributions limits do not limit total spending and actually
increase spending among incumbents and Democrats in states with more restrictive
limits. The research on the impact of contribution limits reveals that laws do not always
have their intended consequences and, therefore, caution must be exercise before passing
any legislation since unintended results often occur. Contribution limits may restructure
how donations are collected, but, do not necessarily result in less spending.

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Studies of campaign reforms have not been contained just to the federal level. The
states provide a wide variety of different campaign finance laws to examine; however,
due to data considerations only a few studies have examined contributions at the statelevel. Hogan and Hamm (1998) found that the population size of a district was the mostimportant factor in predicting a candidate’s spending level. Additionally, they found thatspending was higher in states with restrictive campaign finance laws, more professional
legislatures and where party control of the legislature was in doubt. Moncrief and Patton(1993) and Stonecash (1990) also found that spending was higher when partisan controlof the legislature was up for grabs. Additionally, Moncrief and Thompson (1998) foundthat spending was higher in Idaho and Stonecash (1990) found that it was higher in New
York when control of the legislature is uncertain indicating that higher spending wasconsistent across legislatures of different professional levels.
State legislative research has not been confined to just general elections but has
also examined spending in primary elections. Breaux and Gierzynski (1998) found thatincumbents spend more than challengers and open-seat candidates in primary elections.
Additionally, primary expenditures were found to be higher in professional states. Hogan(1999) extended the previous research and found that the district population size and thenumber of primary opponents also affect spending. Hogan’s results were in conflict withprevious findings that indicate greater spending levels occur in more professional states.
He found that in more professional states the majority of the money from interest groups
and political parties was saved for the general election and not used during the primaries.
Studies of state level campaign contributions provide an opportunity to study abroader array of regulatory context. Many studies have been limited to one or only a few
states (Donnay and Ramsden 1995; Mayer and Wood 1995; Redfield 1996) or evensingle state studies (Kettl et al, 1997; Redfield 1995, 2000). However, some scholars
have attempted comprehensive studies of campaign finance systems (Malbin and Gais
1998; Mayer 1997; Thompson and Moncrief 1998). The few studies conducted at thestate level have found that PAC money goes mostly to incumbents (Malbin and Gais
1998; Cassie and Thompson 1998) and parties give more to challengers than other typesof contributors (Malbin and Gais 1998; Gierynski and Breaux 1998).
Malbin and Gais (1998) examine the question of why campaign finance laws are
so weakly enforced and they conclude that lawmakers do not consider implementation oflaws they past and that regulatory agencies are not given enough resources to conduct
their jobs as required by the regulations. These results were consistent with the findingsof other scholars that found public financing of campaign seldom had the intended effects
hoped for (Mayer and Wood 1995; Mayer 1998; and Donnay and Ramsden 1995).
Campaign contributions limits have been enacted to increase electoralcompetitiveness (Box-Steffensmeier and Dow 1992; Dow 1994; Hogan 2000; Gross,
Shields and Goidel 2002; Stratmann and Aparicio-Castilli 2001). However, they have notalways achieved their desired goals. Some scholars have found a positive relationshipbetween limits and competition (Krasno and Green 1993; Green and Krasno 1988, 1990)
while others have found a negative relationship (Jacobson 1980; Sorauf 1992; Alexander
1992; Teixeira 1996).
The impact of contribution limits is varied and the affects are not always
completely understood. First, contribution limits negatively impacts future incumbents
share of the vote. However, incumbents responsible for passage of contribution limits do

7not suffer at the polls (Stratmann). Second, campaign contribution limits lessens thedifference in candidate spending (Hogan 2000). Third, the distribution of contributions
among candidates and the frequency of contributions are affected by limits; however, thisrelationship is not completely understood (Aranson and Hinich 1979; Box-Steffensmeierand Dow 1992; Dow 1994; Hinich 1977; Welch 1974). Finally, The consequences ofcontribution limits are not limited just to electoral competition but in terms of voter
turnout, the number of candidates and partisan competition (Box-Steffensmeier and Dow
1992; Dow 1994; Hogan 2000; Gross, Shields and Goidel 2002; Stratmann and AparicioCastilli 2001).
Actions of Recipients
When Are Campaign Contributions Given?
The timing of campaign contributions is an important question within the
campaign finance literature as this research provides not only insight into the motivationof contributors, as will be discussed later, but the action of recipients in response toreceiving a donation. An important question debated in this literature is the impact of
campaign contributions on legislators’ issue position. The key question addressed in thisliterature is how often a contribution results in a change in the vote that would have beencast if the contribution had not been received. Many scholars have found a strong
correlation between contributions and votes on legislation (Silberman and Durden 1976;
Chappell 1981, 1982; Kau Keenan and Rubin 1982; Welch 1982, Fendreis and Waterman
1985; Grier and Munger 1986; Hall and Wayman 1990; Endersby and Munger 1992;
Stratmann 1991, 1995; Kroszner and Strahan 2000). However, many of these studies
suffer from a simultaneous equation bias in that if interest groups contribute to legislatorsthat support them anyway the impact of contributions on vote decisions would beoverestimated. It is extremely difficult to isolate the impact of campaign contributions on
legislative votes since often a legislator would have voted the same without thecontribution.
Stratmann (2000) attempts to overcome the simultaneous equation bias problem
that exists in examining the relationship between contributions and legislative votes by
examining the behavior of legislators at different points in time. Stratmann (1992, 2000)
provides only a couple of studies that quantitatively examine the behavior of recipients ofcampaign contributions. He examines roll call votes on price supports and quotas forvarious farm commodities in 1981 and 1985 (Stratmann 1992). The results show thatwithout campaign contributions farm interests would have lost seven out of ten votes.
Additionally, campaign contributions given at the time of a vote had a greater impact on
voting behavior than those given one or two years prior to a vote. Stratmann (2000)
examines Financial Services legislation and finds results similar to his previous work.
Changes in contribution levels determine changes in roll call voting behavior.
Additionally, contributions from competing groups are partially offsetting and senior
members are less responsive to changes in contribution levels than junior legislators.
Behavior and Motives of Contributors

8Who Receives Money?
The most basic question addressed within the sector of the literature on interest
group behavior is who receives contributions. Jones and Borris (1985) were the first to
conclude that in state legislative elections PAC’s tend to give money to gain influencewith legislators instead of attempting to target close legislative races. The literature
discusses six factors in explaining who receives interest group contributions- incumbent
status (Malbin and Gais 1998; Cassie and Thompson 1998), constituency interest (Kau,
Keenan, and Rubin 1982; Denzau and Munger 1985; Stratmann 1992), committee
membership (Denzau and Munger 1986; Grier and Munger 1991; Welch 1974),
leadership position (Thielemann and Dixon 1994), candidate gender (Thompson,
Moncrief, and Hamm (1998) and closeness of the election (Kau, Keenan, and Rubin
1982).
The literature on campaign contributions has found that contributors tend to give
more money to incumbent candidates (Malbin and Gais 1998; Cassie and Thompson
1998). Interest groups desiring to influence policy outcomes target their contributions tothose most likely to hold office and be in a position to impact legislative outputs,
therefore, with high incumbent re-election rates it reasons that incumbents would receive
the majority of contributions in a system driven by particularistic contributors. On theother hand, universalistic contributors would target their resources to vulnerable
incumbents and challengers in competitive races. What may seem like a contribution to
impact an election outcome may in fact be an attempt to gain favor of the elective official
in office.
In contrast to interest groups, parties give more money to challengers (Jones andBorris 1985; Stonecash 1998, 1990; Thompson and Cassie 1992; Gierzynski and Breaux
1994, 1998; Malbin and Gais 1998; Thompson, Cassie, and Jewell 1994; Cassie andThompson 1998). Schecter and Hedge (2001) found that in Florida political parties areespecially more likely to give money to challengers in competitive races. The differencein the targeting of contributions by interest groups and parties indicates that politicalparties are more interested in maximizing the number of seats in the legislature whileinterest groups are interested in gaining favor with office holders.
The interests of the constituency (Kau, Keenan, and Rubin 1982; Denzau andMunger 1985; Stratmann 1992) play a role in campaign donations. Denzau and Munger(1985) use a constrained maximization model in which three agents have preferences
over policy outcomes. Interest groups contribute in order to improve their own wealth,voters provide votes to obtain outcomes closer to their desired position and legislators
seek both campaign contributions and votes in order to obtain re-election. In this model
legislators are constantly weighing their options between the concerns of the constituentsand the money provided by interest group contributions. The difficult decision on castinga legislative vote arises when the preferences of the contributor are not in agreement withthe preferences of the constituents.
Additionally, money is most likely to be contributed to candidates in close races(Kau, Keenan, and Rubin 1982) and those that serve on committees of importance to theconcerns of the contributor (Denzau and Munger 1986; Grier and Munger 1991; Welch
1974). When the outcome of an election is close contributors often sense the opportunity
to positively affect their position in the legislature by defeating an unfavorable incumbent

9

or they fear the defeat of a member supportive of their position. Additionally, in a closeelection the winner may feel an increased sense of obligation to contributors that may
help pull him or her over the top to win the election. Campaign contributions are alimited resource; therefore; contributors have to exercise care in maximizing the benefits
received from their donations. It is very difficult for challengers to overcome theadvantages of incumbents, therefore, it is often not the best use of resources to pourmoney into a challenger’s campaign who is likely to be defeated. Additionally, in stateswith strong committee systems committees often are able to kill legislation independentof the desires of the full floor, therefore, an interest group has the possibility of killing
legislation prior to consideration by the committee of the whole. Other members of thelegislature that are not as knowledgeable in an area often defer to committees, therefore
the committees in the best position to shape legislation in favor of the interest groups
position.
Thielemann and Dixon (1994) found that contributors are motivated by acandidate’s place in the legislative leadership. Those in position of leadership receive
more contributions than rank and file members. Additionally, women have been found toreceive fewer contributions in highly professional legislatures than men (Thompson,
Moncrief, and Hamm 1998). This may be the product of the dominance of parties, PAC’sand interest groups in these states resulting in women still be seen as outsiders and not as
viable candidates. Hogan and Thompson (1998) found that minority candidates did notreceive as much money as white candidates, but differences in the gender and racial gaps
in fundraising were not that great and the gaps may further diminish as more minorities
and women gain leadership status.
Why Are Campaign Contributions Given?
One of the most important questions addressed in the literature is why campaign
contributions are given to certain candidates. Some interest groups employ an electoral
strategy while others given contribution in order to gain access to elective officials(Jacobson and Kernell 1982; Eismeier and Pollock 1985; Langbein 1986; Wright 1989).
Additionally, research reveals two major reasons for campaign donations: influencing
policy and affecting electoral outcomes. The literature predicts that contributions are
given with the hope of influencing public policy (Ben-Zion and Eyton 1974; Bental and
Ben-Zion 1975; Kau, Keenan, and Rubin 1982; Kau and Rubin 1982). Additional
research has progressed beyond prediction toward a quantitative assessment of therelationship between contributions and votes.
Particularistic contributors attempt to influence policy for their personal benefit(Austen-Smith 1995, 1998; Ben-Zion and Eytan 1974; Box-Steffensmeier and Dow
1992; Cox and Munger 1999; Chappell 1982; Jones and Hopkins 1985; Hendrie, Salantand Makinson 2000; McAdams and Green 2000; Morton and Cameron 1992; Snyder
1990; Strattmann 1998; Welch 1977 and 1980). On the other hand, universalistic
contributors donate money with the hope of affecting election outcomes (Fuchs, Adler
and Mitchell 2000; Magee, Brock and Young 1989; Morton and Cameron 1992; Mueller
1989; Mutz 1995; McAdams and Green 2000; Poole and Romer 1985; Sabato 1985;
Snyder 1990; Welch 1974 and 1980). Universalistic contributors efforts benefit a much10

broader segment of the population since all supporters of the candidate benefit throughtheir efforts to elect them to office.
Additional research has argued that contributors are not trying to “buy votes” butinstead want to increase the probability that unfavorable legislation will not be enacted bygiving to those that are already likely to support their position (Aranson and Hinich 1979;
Hinich 1977). Conversely, other studies have found that contributions are an attempt to
influence legislation outcomes (Austen-Smith 1995, 1998; Ben-Zion and Eytan 1974;
Box-Steffensmeier and Dow 1992; Cox and Munger 1999; Jones and Hopkins 1985;
Hendrie, Salant and Makinson 2000; McAdams and Green 2000; Morton and Cameron
1992; Snyder 1990; Strattmann 1998; Welch 1977 and 1980). As discussed previously
the bulk of campaign contributions are given to incumbent candidates that have high reelection rates; therefore it is reasonable to assume that contributors are hoping to achieve
something beyond just the election of a particular candidate.
While a great deal of progress has been made in understanding the motivates ofcontributors most of this progress has been confined to the national level with the statesreceiving less attention. Hopefully, this research will help bridge the gap between federal
and state campaign finance research by employing the use of theories that prior to thispoint have only been tested at the national level.
Theory and Hypotheses
As previously discussed two main motivations exists for campaign contributors.
First, contributions are given with the hope of influencing election outcomes. Second,
contributions are given with the desire to influence legislative votes. Interest groups
desiring to affect the outcome of an election have a simple decision to make prior to theelection of whether to contribute or not contribute to the candidate’s campaign. The
decision to contribute is based upon the probability of the candidate winning the election
and the competitiveness of the election. Contributors are more likely to give to someone
they expect to win, therefore, incumbents receive the majority of contributions (Malbin
and Gais 1998; Cassie and Thompson 1998). Challengers are most likely to receive
contributions when they are facing a vulnerable incumbent. Incumbents that are safe still
receive a large number of campaign contributions. Contributions to incumbents in safeseats provides an indication that many contributions are given with motives outside of theelectoral realm since there is little rational in giving money to affect an election outcome
when that outcome is pre determined.
The second major motivation of contributors is influencing policy outcomes.
Contributors have to make decisions at various stages in the legislative process. The
decision to contribute is motivated by various factors. In some legislatures the leadershiphas control over the legislative agenda, therefore, contributions to the leadership may
provide interest groups with the biggest bang for the buck (Thielemann and Dixon 1994).
This may especially be the case for groups desiring to keep legislation off the calendar
since the leadership can kill legislation without consideration by other members. A
contribution to the leadership for legislation that the contributor desires to be enacted
may have the benefit of placing the issue on the agenda, however, it does not necessarily
result in a positive outcome for the legislation.

11

The second stage of the legislative process in most chambers is consideration oflegislation by relative committees. The power of committees varies from one state toanother depending upon the rules of that state3. The role of the committee system in thelegislative process will be a major determining factor in the decision to donate money tocommittee members and in particular to the committee chair (Denzau and Munger 1986;
Grier and Munger 1991; Welch 1974). If the committee is in the position to killlegislation then contributors are more likely to give money to committee members inorder to achieve the desired outcome. A strong committee system with the power to killlegislation will result in more contributions directed toward committee members prior tothe consideration of legislation. Additionally, it is expected that in strong committee
states contributors will reward members after committee votes.
The contribution process is a series of strategic decisions by interest groups that
result in a variety of outcomes. A contributor makes a choice of whether to make adonation or not prior to the vote. The choice to contribute may be met with a positive or
negative result. The legislator may choose to vote in favor of the group’s position oragainst the group’s position. The decision to vote for the contributor’s position may be
the product of the contribution or a predisposition to vote for the position regardless ofthe contribution. A vote against the position of the contributor indicates that the money
was not effective in changing the vote, however, a positive vote may or may not indicatethat the contribution was necessary to achieve the desired outcome.
An interest group can react to the member’s vote by choosing to give acontribution or not giving an additional donation if they had contributed previously. If
following a positive vote a contribution is given this indicates that the contributor isrewarding a favorable vote. However, if a contribution is not given following a positive
vote then this indicates one of two possible strategies that are being employed. If theinterest group did not give prior to or following a positive vote then this indicates thatthey are employing a free rider strategy in which they reap the benefits of the members
vote without having to make a contribution. A free rider strategy may be employed when
the group believes that the legislator will vote in a positive direction without thecontributions. Additionally, some groups may not have the financial resources tocontribute to a legislator and therefore has no choice but to free ride.
Following an unfavorable vote contributors have a decision of whether to give acontribution. If a contribution was given prior to an important vote and not after the voteand the legislator voted in an unfavorable manner then this indicates a possible
punishment strategy being employed. If a contribution was neither given prior to or
following an unfavorable vote then it is likely that the contributor perceives the legislator
as a lost cause and a contribution as a waste of resources.
An interesting case arises when contributions are given after an unfavorable vote.
A contributor may give prior to and following an unfavorable vote. While it would seemcounter initiative to give following an unfavorable one can surmise possible instances
when this would be plausible. The legislator may have signaled an interest to support theposition of the contributor, but due to electoral or other circumstances could not vote in
the desire direction. However, an indication for future support exists and as a token ofgood will in future votes a contribution is given.
3

See Francis (1989) for a detailed discussion of committee power in state legislatures.

12

An even more unusual case would arise when a contribution was not given prior
to an unfavorable vote but following a vote. The unfavorable vote may have taken theinterest group by surprise who was attempting to free ride on what was perceived to be apositive vote and therefore a contribution is given with the hope of changing the opinionof the legislator in the future. Additionally, an unfavorable vote may have been expected,
however future positive votes are likely and therefore a contribution is given to establish
future good will.
In summary particularistic contributors following one of the eight following
strategies: Different strategies will be employed with different legislators at different
times; therefore these strategies are not mutually exclusive.
Influencing Strategy – contribution given prior to major vote
Influencing Reward Strategy – contribution given prior to and after a positive vote
Reward Strategy – contribution given following a positive vote
Free Rider Strategy – contributions given neither before nor after a positive vote
Influencing Punishment Strategy – contribution given prior to but not after anegative vote
Punishment Strategy – contribution withheld following a negative vote
Influencing/Future Influencing Strategy - contribution given before and after anegative vote
Future Influencing Strategy - contribution given following a negative vote
The literature in campaign finance has addressed a wide array of issues in the
campaign finance system. However, little research has addressed many of the same
important questions at the state level. This research will address the argument between
particularistic and universalistic contributors by expanding previous research to the statelevel. Through this research, hopefully, a greater understanding will be provided as to themotivations behind campaign contributions. Stratmann (1992, 1998, 2000) finds throughan examination of the timing of contributions at the federal level that major votes are
better indicators of campaign contributions than the proximity to the election. Through an
examination of states we gain a better understanding of how legislative structure andcontext impacts contribution decisions.
Particularistic contributions are theorized to be more effective at the state level
than at the national level for several reasons. First, state legislation tends to be less salientwith citizens than national legislation. Most news coverage is focused at the national
level with less attention paid to state legislation, thereby limiting the information the
public receives concerning state politics. This lack of attention to state issues by the
media results in a less informed public. As a result of this lack of news coverage, thegeneral public is less aware of what is going on in their state governments, therefore,
allowing contribution recipients to change their position without fear of electoralconsequences. Additionally, state legislatures tend to be less professional then the UnitedStates Congress, therefore, electoral concerns may not be as great in amateur legislators
thus decreasing the risk for changing one’s vote based on a contribution. Rhyme (2000)
shows that state legislatures have a high rate of turnover with most legislative leaders
staying in their positions for five years or less. Additionally, with eighteen states having
term limits, thereby, forcing members to retire significant turnover will occur into the13future (Rhyme 2000). The high turnover in state legislatures along with the increase
enactment of term limits results in legislators less concerned with re-election, therefore,
resulting in less need for campaign donations.
The primary hypothesis for this study is that proximity to a major vote will be abetter predictor of interest group behavior than proximity to a general election. While theimpact of contributions on votes is beyond the scope of this study the primary hypothesis
is made with the assumption that contributors believe contributions affect vote outcomes,
thus, this perception drives the decision to contribute campaign funds

Model of Legislative Contributions
Information on legislation action will be obtained from LexisNexis State Capital
Universe.4 LexisNexis provides a database on the progress of bills through the legislative
process. Through this data base information can be obtained as to when legislation was
introduced, committee action occurred, and floor action occurred. Universalistic
contributors generally fall into two major groups. First, political parties give money tocandidates with the hope of influencing. Political parties derive their power throughgaining elective office and therefore give money to candidates with universalistic
motives. Second, individuals tend to be universalistic contributors. Individuals tend to be
more concerned with a general ideology of government than with a specific policy
enactment. Additionally, individuals are less likely than corporations to have theresources necessary to expect to be able to influence legislative vote outcomes.
Corporations and political action committees are more likely to be concerned withparticular legislation and, therefore, are more likely to be particularistic contributors.
Corporations are more likely to be attempting to achieve narrow policy goals than
individuals and political parties which are more likely to be concerned with a generalphilosophy of government. Particularistic contributors are expected to give close to amajor vote while universalistic contributors are expected to give closer to the election.
Additionally, it is expected that larger contributions will be given with particularistic
motives while smaller contributions will be given for universalistic reasons.
This study will examine campaign contributions in California, Illinois, and South
Carolina during the 2001 and 2002 legislative session. Legislation included in this study
are chosen from bills selected by the National Federation of Independent Businesses forinclusion in their rating scores of state legislators. While these scores do not include all
significant legislation considered during the session they include a wide variety of issues
including be not limited to health care, tax policy, environmental policy, education policy
and so forth, thus, making the bills representative of the most important legislationconsidered by the legislature.
Contribution patterns will be examined for three bills from each state (please see
Table 1 for more information on the legislation included in this analysis). The first seriesof bills examined for each state deal with the minimum wage laws and the second seriesof bills examined for each state address some aspect of the health care issue. Finally, thethird series of bills deal with various different issues across the states. The selection of
4

http://web.lexis-nexis.com/stcapuniv/

14three different bills will provide an examination of contribution patterns across states for
similar issues as well as within states across different issues.
The contribution data for this study will be obtained from the National Institute on
Money in State Politics5 web site www.followthemoney.org. The institute provides dataon who contributes money, the amount of the contribution, and the date of thecontribution. Additionally, contributors have been coded by their sector of the economy. 6
A contributor fixed effects model will be used to test for increased or decreased levels ofcontributions for each contributor. The dependent variable is the number and amount ofcontributions. The model will be estimated using a Negative Binomial regression inwhich the dependent variable indicates the number of contributions given by eachcontributor during each week included in the analysis.
Four prime explanatory variables are included in the model to determine theimpact of the primary election, general election and legislative vote event on contribution
patterns. The primary election variable is coded as 1 for each week during the twomonths prior to the primary and 0 for all other weeks. It is expected that contributions
will increase during the two months leading up to the primary. Second, the model will
include a general election variable coded as 1 for each week during the two months prior
to the election and 0 during all other weeks. Third, the vote event variable is coded as 1
from three weeks prior to the legislation being reported out of committee to three weeks
following the floor vote. This specification takes into account that some contributors will
give contributions after a vote to reward the member for a positive vote. Forth, the model
will include a variable indicating legislative activity for each week included in theanalysis. The measure of legislative activity was taken from a Lexis-Nexis search foreach week. The variable indicates the number of hits using the state name as the searchterm. If a bill under went multiple versions during the course of the week then it would be
included multiple times in the legislative count. This measure is superior to a simple
count of bills under consideration since it takes into account bills that are more actively
under consideration. It is expected that the greater the activity on a piece of legislation thegreater the interest group activity.
Results
The analysis reveals that general and primary elections are consistently significant
and positive factors in explaining increases in campaign contributions across all threestates. In California and Illinois the greatest percentage increase in the number ofcontributions occurred prior to the general election (please see tables 2 and 3). In South
Carolina the greatest increase in contributions was found prior to the primary election(please see table 4). This is consistent with what would be excepted in a state traditionallydominated by a single party in the state legislature. Many elections are decided in the
primary with many state legislators running unopposed in the general election, therefore
5

The National Institute on Money in State Politics describes itself as “a nonpartisan, nonprofit program
dedicated to accurate, comprehensive and unbiased documentation and research on campaign finance at thestate level”.
6

For additional information of the coding scheme used by the National Institute on Money in State Politics
please see their web site at http://www.followthemoney.org/database/coding.html.

15

it is reasonable to expect the contributors would target the primary instead of the generalelection.
Two of the nine bills examined in this study were found to result in a significant
positive increase in the number of contributions given. Bill SB604 in California which
creates the Health and Promotion Advisory Board in the Department of Managed Carewas found to result in a 28% increase in the number of campaign contributions while thelegislation was under consideration. Additionally, bill HB 4583 in South Carolina, which
establishes a task force to conduct a review of health insurance mandates, resulted in a
124% increase in the number of contributions.
In Illinois all three bills were found to be significant in explaining the number ofcampaign contributions, however, in all cases the relationship was negative indicating adecrease in contributions surrounding the legislative event. Limitations on fundraisingduring legislative sessions may provide a possible explanation for this finding.
Additionally, the overlap of the vote event with the primary election in the case of HB
4540 may provide an additional possible explanation for the negative coefficient. Future,research will hopefully allow greater insight into the findings in Illinois. However, an
increase in legislative activity in Illinois resulted in a significant and positive impact on
the number of contributions, thus indicating as legislative activity increases the numberof contributions increases. This finding provides some evidence that contrary to thefindings concerning specific pieces of legislation, interest groups are indeed trying to
influence policy in the Illinois state house.
The measure of legislative activity included in the model was found to besignificant in eight out of nine cases with the one exception being in South Carolina forthe analysis of HB 4583. However, the legislative activity variable did not behave in thesame manner across all states. In Illinois and California the greater the amount oflegislative activity the greater the number of campaign contributions. This finding
provides some evidence that political action committees become much more active when
legislation is under consideration. However, in South Carolina lobbyist are not allowed tooffer, solicit, facilitate or provide a contribution on behalf of legislators. Future research
will hopefully provide more answers to how the legal restrictions on lobbyist effectcontribution patterns.
Conclusions
The preliminary findings presented in this paper provide evidence that PACs
consistently behave in a universalistic fashion in state legislatures, however they also
attempt to influence vote outcomes in selective cases. Their contribution decisions,however, are mediated by legal restrictions that need to be more fully examined in future
research. Additionally, the findings presented in this research provides some evidence
that money may not have as big of an impact in influencing legislative outcomes in thestates as often portrayed in the media. Interest groups often give to members that alreadyagree with them and; therefore their primary goal is to keep that person in office byhelping in their re-election bid. Future research needs to be undertaken which expands
this study to more states that represent a greater variation in terms of legislative
professionalism and legal restrictions. For example, some states limit contributions

16

during a legislative session and expanding the sample to include such states will provide
insight into the effectiveness of such restrictions.
Finally, an interesting finding in this study is the fact that both pieces oflegislation found to be significant in explaining an increase in contributions were healthcare related. Hopefully, future research will shed light on contribution patterns acrossdifferent policy areas. Additionally, future research will consist of model specifications
that include dummy variables for each week included in the analysis. This will allow foran examination of whether interest groups are giving contributions prior to a legislative
vote or after the vote as a reward. The alternative specification will also provide for a
way to examine contribution patterns in states with session restrictions. Such legal
restrictions may not result in less money being given to legislators, but shift contributions
to immediately before or after a legislative session.

17

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Wright, John R. 1989. “PAC Contributions Lobbying, and Representation.” Journal of
Politics 51:3713-729.

25

TABLE 1: Legislative Bills ExaminedState
California
California
California
Illinois

Illinois
IllinoisSouth Carolina
South Carolina

South Carolina

Legislation
SB 71 – Workers
Compensation
SB 604 – HealthCare Mandate
AB 2242 –Minimum Wage
HB 2487 – Family
and Medical Leave
Expansion
SB 1342 – Mental
Illness Mandate
HB 4540 Minimum
Wage Hike
H 3142 – Right toWork
H 4583 – No New
Health Care
Mandates
H 3289 – Prohibit
Higher Local
Government
Minimum Wages

Senate Action
Passed 25 to 13

House Action
Passed 50 to 29

Passed 24 to 13

Died In Committee

Did Not Pass

Passed 47 to 30

Not Voted On

Passed 96 to 20

Passed 51 to 0

Passed 103 to 10

Not Voted On

Passed 64 to 53

Passed 31 to 11

Passed 84 to 28

PassedPassed 98 to 4

Passed 29 to 12

Committee
Amendment toReplace OriginalBill Passed 84 to
24. Final Passage
Passed 89 to 19
Notes: The bills examined in this study were considered in 2001 and 2002.
The analysis in this paper examines PAC contribution in the lower chamber
in Illinois and South Carolina and the upper chamber in California.

26

TABLE 2
Effects of Vote Events and Elections on Weekly Contributions in the Illinois House:
Contributor Fixed-Effects Model
HB 2487
SB 1342-.2378*-.3022*(.0649)(.0864)
Primary Election.44123*.4872*(.0519)(.0636)
General Election.9154*.9591*(.0524)(.0597)Legislative Activity .0005*.0003*(.000059)(.0001)
N
61305
66510
Number of PACs
594
642
Log-likelihood-13819.538-10228.24
Notes: Statistical significance at the .05 level indicated by *Standard errors are in parentheses
Vote Event

HB 4540-.1352*(.0582).5421*(.0521).9001*(.0522).0004*(.0001)61305
594-13823.766

TABLE 3
Effects of Vote Events and Elections on Weekly Contributions in the California Senate:
Contributor Fixed-Effects Model
SB 71
SB 604
Vote Event-.0358.2770*(.05584)(.0525)
Primary Election.6665*.8432*(.0552)(.0620)General Election.9328*.9563*(.0642)(.0750)Legislative Activity .0089*.0008*(.0001)(.00007)
N
98037
80075
Number of PACs
943
770
Log-likelihood-14585.07-11035.355
Notes: Statistical significance at the .05 level indicated by *Standard errors are in parentheses27

AB 2242.0009(.00008).6385*(.0718)1.016*(.0843).0009*(.00008)
56997
549-8802.4972

TABLE 4
Effects of Vote Events and Elections on Weekly Contributions in the South Carolina
House: Contributor Fixed-Effects Model
HB 4583
HB 3289
1.236*-.1988(.1449)(.2324)
Primary Election
1.888*
1.672*(.1144)(.1083)General Election
1.014*.9048*(.1599)(.1488)Legislative Activity -.0022-.0020*(.0005)(.0004)
N
18720
21944
Number of PACs
180
211
Log-likelihood-1826.807-1939.4862
Notes: Statistical significance at the .05 level indicated by *Standard errors are in parentheses
Vote Event28

HB 3142-.2002(.2424)
1.673*(.1081).9043*(.1488)-.0020*(.0004)21944
211-1939.5112