Since the Supreme Court’s 2010 decision in Citizens United v. FEC, which freed corporations and labor unions to finance independent expenditures in support of federal candidates, the issue of corporate and union spending in elections has become a frequent and impassioned topic of political discussion. Most states treat limits on corporate and union giving to candidates differently than those limits imposed on individuals donating to candidates for elected office. Historically, many states have either placed more restrictive limits, or prohibited altogether, corporations and unions from contributing directly to candidates. Proponents of such limits argue that the political involvement of large corporations and powerful unions would overwhelm the ability of individuals to contribute meaningfully, open the door for corruption and “bought” politicians, and lead to an increase in special favors to campaign contributors.
In order to determine whether these claims have merit, we examine the relationship between states with varying restrictions on direct corporate and union contributions to candidates and the non-partisan Pew Center on the States’ study of the best-governed states. This analysis looks at these two variables, and provides a separate analysis for corporate and union contributions because many states have different statutes regarding limitations on one entity or the other.
Ultimately, the analysis demonstrates a lack of a relationship between direct corporate or union contributions to candidates and overall good governance, suggesting that concerns over corporate and union involvement in elections and its effects on the quality of state management are unfounded. The fact that there is no relationship between a state’s regulation of corporate or union contributions to candidates and the quality of management in a state strongly refutes the assumptions inherent in many of the arguments made for limiting or prohibiting campaign contributions by corporations or unions to candidates.