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Citizens United: A Theoretical Evaluation*

Abstract

The 2010 US Supreme Court’s decision on Citizens United v. Federal Electoral Commission lifted restrictions on the funding by unions and corporations of groups engaging in independent political advertising (outside spending). Many have criticized the majority opinion’s premise that outside spending cannot corrupt or distort the electoral process. Fewer have examined the implications of this decision under the Court’s assumptions. Using a game-theoretic model of electoral competition, we show that informative outside spending by a group whose policy preferences are partially aligned with the electorate may reduce voter welfare. This negative effect is more likely when policy information is highly valuable for the electorate or congruence between the group and voters is high. We further show that the regulatory environment produced by the Court’s decision is always suboptimal: the electorate would be better off if either groups were allowed to coordinated with candidates or if outside spending was banned altogether.

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Carlo Prato, Department of Political Science, Columbia University, 420 W. 118th St., New York, NY 10027 (cp2928@columbia.edu). Stephane Wolton, Department of Government, Houghton Street, London WC2A 2AE (s.wolton@lse.ac.uk). The authors thank Ethan Bueno de Mesquita as well as conference participants at the Conference in Honor of Norman Schofield at Washington University, Saint Louis. All remaining errors are the authors’ responsibility. To view supplementary material for this article, please visit https://doi.org/10.1017/psrm.2017.7

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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Stephen Ansolabehere , Micky Tripathi , and James M. Snyder Jr. 2002. ‘Are PAC Contributions and Lobbying Linked? New Evidence From the 1995 Lobby Disclosure Act’. Business and Politics 4(2):131155.

Scott Ashworth , and Kenneth W. Shotts . 2010. ‘Does Informative Media Commentary Reduce Politicians’ Incentives to Pander?’. Journal of Public Economics 94(11):838847.

Deborah Jordan Brooks , and Michael Murov . 2012. ‘Assessing Accountability in a Post-Citizens United Era’. American Politics Research 40(3):383418.

In-Koo Cho , and David M. Kreps . 1987. ‘Signaling Games and Stable Equilibria’. The Quarterly Journal of Economics 102(2):179221.

Stephen Coate , and Stephen Morris . 1995. ‘On the form of transfers to special interests’. Journal of political Economy 103(6):12101235.

Philip Dalton , and Charlton McIlwain . 2011. ‘Third-Party Hatchet Ads: An Exploratory Content Study Comparing Third-Party and Candidate Spots From the 2004 Presidential Election’. Atlantic Journal of Communication 19(3):129151.

Jeffrey C Ely , and Juuso Välimäki . 2003. ‘Bad reputation’ The Quarterly Journal of Economics 118(3):785814.

Justin Fox , and Richard Van Weelden . 2012. ‘Costly transparencyJournal of Public Economics 96(1):142150.

Richard L. Hall , and Alan V. Deardorff . 2006. ‘Lobbying as Legislative Subsidy’. The American Political Science Review 100(1):6984.

Jan Potters , and Frans vanWinden . 1992. ‘Lobbying and Asymmetric Information’. Public Choice 74(3):269292.

Andrea Prat . 2005. ‘The Wrong Kind of Transparency’. The American Economic Review 95(3):862.

James M. Snyder 1989. ‘Election goals and the allocation of campaign resources’. Econometrica 637660.

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Political Science Research and Methods
  • ISSN: 2049-8470
  • EISSN: 2049-8489
  • URL: /core/journals/political-science-research-and-methods
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