Tilman Klumpp

The Business of American Democracy: Citizens United, Independent Spending, and Elections

In Citizens United v. FEC (2010), the U.S. Supreme Court ruled that restrictions on independent political expenditures by corporations and labor unions are unconstitutional. We analyze the effects of Citizens United on state election outcomes. We find that Citizens United is associated with an increase in Republican election probabilities in state House races of approximately four percentage points overall and ten or more percentage points in several states. We link these estimates to “on the ground” evidence of significant spending by corporations through channels enabled by Citizens United. We also explore the effects of Citizens United on reelection rates, candidate entry, and direct contributions. Implications for national elections and economic policy are discussed.

Public Communication Devices in Financial Markets

This paper studies the role of public communication devices for information aggregation in financial markets. The paper investigates the incentives for informed traders to reveal their information truthfully to the public. In the model, a subset of traders receives noisy signals about the value of a risky asset. Between trading periods, these agents post messages on a public communication device. Uninformed traders, called the public, read these messages. In addition, noise traders are present to facilitate trade. Informative (i.e. fully revealing) equilibria exist if the number of informed traders is sufficiently large and the number of noise traders is sufficiently small. The reason is that informed traders are informationally small enough to refrain from market manipulation and trade on their private signals only. After these initial trades, they announce their signals truthfully in an effort to push the market price in a direction that supports the initial trades.

The Voting Rights of Ex-Felons and Election Outcomes in the United States

Approximately one in forty adult U.S. citizens has lost their right to vote, either temporarily or permanently, as a result of a felony conviction. Because laws restricting voting by felons and ex-felons disproportionately affect minorities, and minorities tend to vote for Democratic candidates, it has been hypothesized that felony disenfranchisement hurts Democratic candidates in elections, thus helping Republican candidates. We test this hypothesis using variation in felony disenfranchisement laws across U.S. states and over time. During the 2000s, a number of states restored the voting rights of ex-felons. Using difference-in-differences regressions, we estimate the effect of laws reenfranchising ex-felons on the vote shares of major party candidates in elections for seats to the U.S. House of Representatives. We argue that the regression estimates provide an upper bound for the true effect of restoring voting rights to ex-felons on the vote shares of major party candidates. Using this upper bound, no House majority would have been reversed in any year between 1998 and 2012, had all states allowed ex-felons to vote.