A Free-Market Reform of Campaign Finance.(Brief Article)

Threatened by the worst economic slowdown in a decade, the Senate acted with uncommon dispatch as the new session began. Clearing the decks, it immediately got down to the urgent business at hand, and, on April 2, passed ... a campaign finance reform bill?

Whether the House and the Supreme Court will approve the measure are matters still in doubt, but the McCain-Feingold bill has come much farther than anyone expected a year ago, and it stands a good chance of becoming the most sweeping campaign finance reform law since Watergate.

When considering the justifications for the need for reform--that candidates who raise a lot of money have an unfair advantage, and that campaign donations will influence legislative votes--one has to ask, how are we to tell whether an abundance of campaign donations is not simply a sign of a candidate's success in terms of his performance and positions, and how do we know how a member of Congress would have voted absent campaign donations?

John Lott of Yale and Steven Bronars of the University of Texas address the second issue in an elegantly designed paper in the Journal of Law and Economics, examining "whether contributions alter how the politician votes or whether these contributions constitute support for like-minded individuals." They looked at the voting behavior of retiring members of Congress in their last year in office. Since these members were not campaigning, they could not be "selling" their votes for donations.

If the influence argument is true, "there should be systematic changes in voting behavior when future contributions are eliminated," wrote Lott and Bronars. In fact, they found no such changes, indicating that the money supports views rather than buying votes.

But reformers aren't interested in facts like these. They prefer to draw conclusions from the correlations: "Big tobacco," "big oil," etc., not only purchase votes, they drive sickened voters from the polls. Thus, McCain-Feingold.

Many conservatives think they have an antidote: immediate disclosure of campaign contributions. There's no need to change the law, they say; instead, simply tell voters who is giving to whom (and how much), and let the voters use this information to make their decisions.