Page 27 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE

active in state elections over three elections cycles we determine that these

characteristics and the spending patterns associated with them can be
associated differentially with issue versus candidate advocacy groups.

Political Activity of Advocacy Groups

The extent of the election landscape in the United States combined with

the complexity of tax and regulatory law relating to political advocacy groups has
created an extensive list of organizational forms for such groups. Groups are

classified as PACs (Political Action Committees), 527s, 501(c)s, and non-federal
groups. A fundamental issue in the distinctions among these classifications relates

to the locale of the political activity of an advocacy group. Groups that engage in

activity that expressly advocates for the election or defeat of a candidate in a
federal election are subject to more rules and regulations than those who advocate

for a specific issue or position, especially with regard to the level of fund raising
and giving to candidates. Non-federal groups as well as 527s in their non-federal

activity (and certain 501(c)s) are less regulated with regard to their fund raising

and spending. Needless to say, however, the money trails between advocacy
groups are interwoven, complicated and purposely convoluted.

PACs, and to a lesser extent the more recently created 527s, have been
subject to a great deal of academic analysis. Ansolabehere, de Figueiredo, and

Snyder (2003) examine both the reasons individuals make campaign contributions

and the evidence that political influence is a result of those contributions. They
separate the investment motives of contributors from consumption

motives. Contributions as investments suggest that contributors seek a political
return from their contributions while consuming contributors are identified as not

necessarily seeking a political return but rather the consumption utility of
voluntary participation in a public good activity or association with a specific

candidate or issue.

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