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 their 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 in the United States. 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 legislators go through the revolving door. The effect is stronger among Republicans, driven entirely by a drop in voluntary movements out of office, and there is no negative effect on the propensity of legislators to leave politics without going through the revolving door. This suggests that the ruling had a concentrated effect on certain legislators, who substituted money in the form of a post-office salary for money in the form of campaign spending. More permissive campaign finance regulation may thus not increase overall spending, and stricter rules may not be successful in eliminating money from politics.