I think that was the number one question asked when phone banking today. People claim they do not like negative campaigning. I know I am not a fan of it. However for better or worse, it works. Wikipedia lays out why in detail, as does this piece by Mark Penn in Politico. One point of particular interest to political parties is that the negative campaigning tends to suppress turnout from unaffiliated voters. Therefore if you are a partisan and cannot garner popular support then negative campaigning is probably especially helpful.
Intuitively, I think that negative campaigning is also a long-term negative for both political parties. The goals of candidates and political parties are not completely aligned in this respect. Political parties should aim to be more inclusive. The greater number of people that participate in a party the greater its influence. Candidates do not have this incentive. However the candidates have most of the money, or control it, other than the PACs. Therefore political parties take a backseat to the goals and whims of the various campaigns. Rounding up the campaigns and getting them coordinated requires a skilled chairperson or leader, something that they generally lack. This creates a negative feedback loop where people do not want to be involved in politics because it is negative, but politics becomes negative because people are not involved.
On a micro level people can lead by example by becoming involved and not using negative campaign tactics in their own campaigns. This will not fix the problem of negative campaigning and the lure of its efficacy in statewide or national campaigns, but I believe it can blunt it. Also it is important to point out that as candidates who do not use negative campaigning gain experience and move into higher positions, they will be more reluctant to go negative. The other solution would be for unaffiliated voters to cease making voting decisions based on negative advertising. If the efficacy of the advertising is eliminated, then the campaigns will not use it.
Some might protest that placing the burden on the voters is unfair or unproductive. However it is important to point out that the only people in power are the ones that the voters are voting for. By voting for candidates that engage in negative advertising you are actually driving the candidates who do not use it out of the process. The people that don’t use negative advertising cannot control the fact that they lose by doing so, and that this loss includes a loss of political capital that can be used to stop negative campaigning.
Others suggest that campaigning be more regulated. There is already a large body of law surrounding campaigning but the First Amendment restricts the ability of the government to regulate the content of political advertisements. This can be worked around by finding other hacks, such as setting up a voluntary public financing program similar to the one we have in Connecticut and include restrictions on negative campaigning as part of the strings we attach. However I do not think these programs are likely to succeed if we do not fix the fact that negative campaigning works in the first place.