DP16774 Corporate Donations and Political Rhetoric: Evidence from a National Ban

Author(s): Julia Cagé, Caroline Le Pennec, Elisa Mougin
Publication Date: December 2021
Date Revised: April 2022
Keyword(s): Campaign finance, Campaign manifestos, Corporate donations, Elections, Political rhetoric, Text Analysis
JEL(s): D72, H7, P48
Programme Areas: Public Economics, Political Economy
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16774

Do campaign finance regulations influence politicians? We study the effects of a French ban on corporate donations 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. We show that banning corporate donations discourages candidates from advertising their local presence during the campaign, as well as economic issues. The ban also leads candidates from non-mainstream parties to use more polarized language. These findings suggest that private donors shape politicians' topics of interest, and that campaign finance reforms may affect the information made available to voters through their impact on candidates' rhetoric.