In many countries worldwide, campaign contribution limits are implemented to restrict money's political influence. However, their actual effectiveness remains unclear. This paper examines the effects of these limits using a regression discontinuity design (RDS) based on Colombia's municipal contribution rules. Our analysis reveals that looser limits lead to more public contracts going directly to campaign donors after elections.

Specifically:

* Data & Methods: We employed an RDS exploiting Colombian institutional contribution thresholds.

* Key Findings:

* Looser post-election contribution limits significantly increased the number of public contracts assigned to winning candidates' top donors.

* This finding suggests that relaxed limits primarily influence post-election allocation rather than pre-election outcomes or who gets elected.

These results challenge simplistic views by showing:

* Limiting donation power doesn't necessarily reduce post-election access for donors.

* Looser constraints increase donor control over public contracts, not just their political voice.

Furthermore, our findings have important implications:

* Public spending favors specific interests (donors).

Contract performance worsens: Contracts awarded to winning candidates' backers are more likely* to exceed budgeted costs. This suggests kickbacks or preferential treatment may be facilitated by looser contribution limits post-election.

Overall, this research demonstrates a clear link between relaxed campaign contribution regulations and potentially corrupt outcomes in public procurement following elections.