POLITICAL CAMPAIGNS AS RENT-SEEKING GAMES - TAKE THE MONEY AND RUN

In the 1980s, the practice of converting campaign contributions into p ersonal income on retirement was curtailed by the Federal Elections Co mmission (FEC), but an exemption allowed some representatives to conti nue this practice. Consequently, a natural experiment was created in w hich congressional candidates faced different sets of rules. By identi fying candidates who could keep excess campaign funds, the authors wer e able to empirically measure the relevance of wealth maximization in political campaign decisions. The evidence of the 1980s suggests that candidates are concerned with more than simply winning elections. Spec ifically, candidates who qualified for the FEC's exemption raised more money and spent smaller portions of those contributions on their camp aigns. This results in a sizable lump-sum transfer payment on retireme nt.