CAMPAIGN CONTRIBUTIONS IN AN UNREGULATED SETTING - AN ANALYSIS OF THE 1984 AND 1986 CALIFORNIA ASSEMBLY ELECTIONS

The study of campaign finance has been greatly informed by the use of economic models of the contributor-legislator relationship. Predominant among these is the investment theory of resource allocation which predicts that interest groups equate the marginal value of the last dollar provided across recipients. The model, however, is predicated on the existence of an unregulated campaign finance environment. This is clearly antithetical to the federal election arena in which most studies of campaign finance have been conducted. We test the investment model in the unregulated setting of the 1984 and 1986 California Assembly elections. Our results indicate the acceptance afforded the model is justified. Further, the empirical findings in this paper suggest that restrictions on campaign contributions benefit incumbent and major party candidates at the expense of challengers and members of minor parties.