Does Public Financing Motivate Electoral Challengers?

Do attempts to level the financial playing field lead more candidates to run for office? In theory, public financing should increase competition, presumably because additional funding from taxpayers motivates more challengers to run for office. I provide a novel test of this logic with data on all candidates running for state legislature across all US states between 1976 and 2018. The results suggest that public financing exerts a generally positive effect on the total number of candidates running for state legislative office and specifically increases the number of candidates running in elections for every additional year after the passage of public financing. This effect is amplified in states that offer greater amounts of public funds. I conclude that the availability of public financing can be an equalizing force in elections, and that state legislative elections continue to experience increased competition in the years after the introduction of public financing.