The distinctive politics of campaign finance reform

This article presents a unified theory explaining several conflicting empirical observations in the politics of campaign finance. It identifies those circumstances that foster or frustrate the enactment of financing laws that increase the competitiveness of elections. I argue that the competitiveness of financing laws is a result of three strong incentives when they operate in differently structured party systems. First, lawmakers have an incentive to make laws to protect their incumbency from competitors. This incentive generally overwhelms the (weaker) incentive to enact popular, competition-enhancing reforms. Secondly, lawmakers, when they act through political parties, have an incentive to cooperate with rivals to reduce the costs of political defeats. Thirdly, lawmakers seek to enact reforms that are consistent with their normative goals. These incentives combine with several party system variables to determine when campaign finance reform is likely to occur and how it will impact on the competitiveness of elections.

Has the Financial Services Reform Act fixed the problems with the regulation of securities and derivatives?

The Financial Services Reform Act 2001 (Cth) introduced new definitions of“derivative” and “financial product” into the Corporations Act 2001 (Cth), andreplaced the separate regulatory regimes governing futures contracts andsecurities with a single financial markets authorisation regime and a singleintermediary licensing regime. This article examines the reforms to evaluatewhether they have been successful. It is argued that there are definiteimprovements resulting from the reforms, and the scope for regulatoryarbitrage has been greatly reduced. However, numerous problems remain.There are significant differences in the regulation of securities and deriva-tives. The distinction between securities and derivatives is still based on legalcharacteristics, not economic function. There is uncertainty as to the exactscope and interaction of the definitions, particularly with respect to equityderivatives, warrants and options. The current law has thus not fullyaddressed many of the problems that existed prior to the reforms.