Two years ago, Georgia election contests ranked second lowest in the country with an average of only 1.38 candidates, according to the report published this week by the Georgia Public Interest Research Group.

At the same time, winning candidates in Georgia enjoyed an average margin of victory of 76.9 percent, third highest in the nation.

The 2000 elections occurred months after Georgia lawmakers raised contribution limits in legislative races from $3,000 to $5,000.

"When the limits get as high as states like Georgia, incumbents are able to build war chests," said Georgia PIRG's Jennifer Giegerich. "(Potential challengers) get discouraged. They don't even try to run."

The study analyzed 30,000 elections in 45 states, primarily in 2000 but including some in 1998, 1999 and last year. It found that states with strict campaign-contribution limits tended to produce races featuring more candidates, lower margins of victory and lower incumbent re-election rates.

For example, winning candidates in eight states with contribution limits between $200 and $600 won by an average of 46.8 percent. On the other hand, 13 states with no limits on contributions - including California and Texas - had an average victory margin of 56 percent.

The study found that states tended to have more competitive elections after their legislatures imposed stricter limits on campaign donations.

In Kansas, for example, the average victory margin fell from 42.2 percent in 1988 to 35.1 percent in 1990, after lawmakers reduced the contribution limit from $1,500 to $1,000. During the same two years, the incumbent re-election rate fell from 93 percent to 89 percent.

"The tighter the limit, the tougher it is for the incumbent to get re-elected," said Thomas Stratmann, the study's author and an economics professor at George Mason University.

The report's findings run counter to other recent studies, notably an examination of contributions to U.S. House candidates in the last three elections.

That report, released last year by the Washington-based Campaign Finance Institute, showed that challengers and candidates for open seats took greater advantage of the $1,000 cap on donations than incumbents. Its results were welcomed by supporters of raising contribution limits at the federal level.

But Ms. Giegerich said the PIRG report should serve as a warning of the threat higher limits pose to healthy competition and, thus, voter choice.

"If there is anything we can do to get at this competitiveness problem, we need to be lowering the limits, not raising them," she said.