Firm Donations and Political Rhetoric: Evidence from a National Ban
Caroline Le Pennec
American Economic Journal: Economic Policy (Forthcoming)
Do campaign ﬁnance regulations inﬂuence politicians? We study the eﬀects of a French ban on political donations from ﬁrms passed in 1995. We use a diﬀerence-in-diﬀerences approach and a novel dataset combining the campaign manifestos issued by every candidate running for a seat in the French parliament with detailed data on their campaign contributions. The ban on ﬁrm donations could aﬀect political rhetoric, either through a resource eﬀect or through a change in the pool of potential donors. We show that banning ﬁrm donations discourages candidates from advertising their local presence, as well as eco-nomic issues, during the campaign. The ban also leads candidates from non-mainstream parties to use more polarized language. These ﬁndings suggest that politicians strategi-cally adjust their campaign communication to secure contributions from speciﬁc sources, and that campaign ﬁnance reforms may aﬀect the information made available to voters through their impact on candidates’ rhetoric.