Abstract

In 1974, Congress amended the Federal Election Campaign Act (FECA) to create a public funding option in presidential primaries, in an attempt to level the playing field between establishment and underdog candidates. However, beginning in the 1990s, people saw candidates rejecting these public funds, which essentially amount to “free” money. Why do some candidates reject public financing? This paper argues that institutional factors, such as restrictions on when and where candidates can spend these funds, coupled with features of the electoral system, such as front-loading, can explain this trend. Further, the paper argues that underdog candidates should be more likely to reject public funds because of restrictions on spending in early key states. Using data from the Federal Election Commission from 1976 to 2000, partial support is found for the hypotheses. Strong support is found for the contention that front-loading has an effect on the decision to reject these funds. However, there is no support for the hypothesis that underdog candidates are more likely to reject. The results of this study raise important questions about the unintended consequences of institutions and the effect of campaign finance law in the United States.

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