Kickbacks and Limits on Campaign Donations

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 data 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 reflected by the fact that looser limits are associated with more kickbacks for each donor, which are awarded in a more discretionary way.

Speaker bio

Nelson Ruiz is a Lecturer in Comparative Politics in the Department of Politics and International Relations at Oxford University.

His research interests are in the political economy of development. Nelson uses quasi-experimental designs, to study the role of politicians and political institutions in economic development. He has studied how political representation of political minorities can lead to conflict, how vote buying can affect corruption, and how electoral systems can affect who runs for office. He is also interested in studying the role of campaign finance contributions on politician selection, and distortions on public procurement.