Contribution Limits and Transparency in a Campaign Finance Experiment

We experimentally compare electoral outcomes when donor contribution limits are varied. The effect of contribution limits is studied under three levels of transparency: one where donors’ preferences and donations are unobserved by the candidate and public; one where they are observed by the candidate but not the public; and one where they are observed by all. We label them full anonymity (FA), partial anonymity (PA) and no anonymity (NA), respectively. We find that a combination of stricter contribution limits and full transparency, our NA condition, is most successful at limiting donors’ influence on policy choice. We find that stricter contribution limits improve social welfare. We further find that the partial and no anonymity settings lead to “centrist bias,” whereby implemented policies, on average, are more centrist than the candidate’s preferences.