Ideological donors, contribution limits, and the polarization of state legislatures. Working Paper

What is the relationship between campaign finance and political polarization, and do contribution limits affect this relationship? In this paper I show that legislators respond to the ideological preferences of those who fund their campaigns–ideologically motivated individual donors and less ideological political action committees (PACs). I also demonstrate that limits on campaign contributions affect the ideologies of legisla-tors in office. Using an original dataset of campaign contribution limits in the states over the last 16 years I exploit variation across states and within states over time to show that higher individual contributions lead to more extreme legislators, while higher limits on contributions from PACs yield more ideologically moderate legislators. These results suggest that the connection between donors and recipients plays a role in the story of the polarization of American legislatures. ∗Many thanks to Brandice Canes-Wrone, Nolan McCarty and Kosuke Imai for helpful feedback. Additionally, thank you to members of the Princeton University Graduate Student Seminar in American Politics and the members of the Princeton American Politics Dissertation Working Group. Please do not cite or circulate without permission