How Campaign Finance Reform Contributed to Polarization

A new book shows how party money goes toward more moderate candidates.
By Seth Masket ,

A Donald Trump supporter listens to Trump give a speech outlining his vision for tax reform at his skyscraper on Fifth Avenue on September 28, 2015, in New York City. (Photo: Andrew Burton/Getty Images)

One of the more compelling arguments for campaign finance reform has long been that it would undermine partisanship. After all, a great deal of money goes to political parties. Cut off the money to them, and you undermine their influence over candidates and elected officials, right?

If these issues concern you, I strongly encourage you to read Ray La Raja and Brian Schaffner's new book Campaign Finance and Political Polarization: When Purists Prevail. Their approach has been to examine the American states that have been experimenting with campaign finance restrictions on parties over the past few decades. What they have found is not that the reforms have been ineffective—rather, they've achieved the opposite of their goal. Those states with campaign finance restrictions on parties have seen more rapid polarization of their state legislatures than states without such rules.

Why might this be the case? The authors break down a lot of important data on campaign donation patterns. As they note, there are several types of donors to campaigns. Parties (and here we're talking about formal party groups like the Republican National Committee or the Democratic National Committee) are only one type of donor. There are also business groups, labor unions, issue activists, and small individual donors.

Employees of MoveOn and Planned Parenthood will make different decisions with their money than the formal Democratic Party will.

Parties, it turns out, tend to support relatively moderate candidates. They do so because, as the authors note, "parties are the sole political organization whose primary goal is to win elections." This is a key point. Issue activists, individual donors, and others tend to back relatively extreme candidates precisely because they want those candidates to move the government in one direction or another. They have a set of issues they care about—abortion, corporate tax rates, minimum wage levels, etc.—and they fiercely want to change the direction of government on those issues. They may end up giving to candidates to reward them for their past stances on issues and to encourage them to remain steadfast to their agenda.

The formal parties, by contrast, are chiefly concerned with winning and holding majorities in Washington, D.C., and in the state capitols. They send their money where it is most needed—usually to competitive districts where relatively moderate candidates are in close races.

So what happens when you cut party funding out of the equation? That's what a lot of states have done in recent decades, placing limits on what individuals can give to parties and what parties can contribute to candidate coffers. Basically, this hurts the more moderate candidates. The money still in the system comes disproportionately from more ideologically extreme donors and goes to more polarized candidates.

Conceptually, there's an important question in here about the nature of political parties. Unlike La Raja and Schaffner, I tend to view parties more as networks. The formal party groups are only parts of these networks, as are the unions, business groups, issue activists, and others. In this view, there really shouldn't be much of a change if parties are hampered in their ability to fund campaigns. Donors will still donate, and the money will still find a way through the networks to the candidates who need it.

Imagine a pre-reform state where liberal donors want to help Democratic candidates but don't know too much about the individual candidate races. So the donors give thousands of dollars to the state Democratic Party and trust them to identify the candidates who could best benefit from it. And the party uses some of that money to hire staff to help out campaigns and decide where the money is most needed.

But then the state passes a reform that puts low limits on what parties can take in from donors or hand out to candidates. So the liberal staffers who worked for the party leave and find jobs at a Super PAC or an interest group. Donors who used to give to the party now give to those other groups, trusting them to make the right call. In some sense, that shouldn't make a difference—those funding groups are still part of the party, and they're the same sort of people who would otherwise be working at the formal party and making the same sorts of decisions.

La Raja and Schaffner's research, however, suggests that the path the money takes does make a difference. The employees of MoveOn and Planned Parenthood and the Service Employees International Union will make different decisions with their money than the formal Democratic Party will, and that has a big impact on who gets elected and how legislatures end up being run.

Those who want to depolarize our government and drive money out of politics need to come to terms with the fact that working toward one of those goals likely undermines the other.