How Permissive Campaign Finance Laws Slow Down the Revolving Door: Evidence from Citizens United.

In this article, I show that more permissive campaign finance regulation leads to fewer legislators going through the "revolving door."" The possibility of having more money spent on campaigns alters the career incentives of politicians who care about being in office and personal wealth, making it less attractive to leave electoral politics to take up a lucrative job. To demonstrate this empirically, I exploit the exogenous removal of campaign finance regulation through Citizens United. Using new data on thousands of state legislators in a difference-in-differences design, I show that the removal of campaign finance laws reduces the probability that lawmakers go through the revolving door. The effect is stronger among Republicans and driven by a drop in voluntary movements out of office. There is no negative effect on the propensity of legislators to leave politics without going through the revolving door. This suggests that the more lenient campaign finance laws had a concentrated effect on certain incumbents, who chose money in the form of campaign spending over money as a post-office salary. More permissive campaign finance regulation thus does not necessarily increase special interest spending, and stricter rules may not be successful in reducing money in politics.