Campaign Finance Transparency Affects Legislators’ Election Outcomes and Behavior

Do audits by executive agencies impact the behavior of those audited? Does revealing negative information about legislators affect electoral results and behavior? Institutions that encourage transparency, such as campaign finance disclosure, influence mass and elite behavior. Campaign finance transparency provides information to voters during legislative campaigns about the character of candidates, and this information affects voter and legislator behavior. The U.S. Federal Election Commission conducted random audits of 10 percent of U.S. House members in the 1970s. This FEC program is the only randomized experiment a U.S. agency has conducted on federal legislators and their electorates. We find that audited legislators were more likely to retire and faced more competitive re-elections relative to the control group, an effect that is amplified among incumbents whose audits revealed campaign finance violations. Further, campaign finance scandals are associated with lower incumbent vote shares and approval; and more negative advertisements in the 2000s.