Working Paper: CEPR ID: DP15150
Authors: Yasmine Bekkouche; Julia Cag; Edgard Dewitte
Abstract: What is the impact of campaign spending on votes? Does it vary across election types, political parties or electoral settings? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that handle the endogenous and strategic nature of campaign spending in multiparty systems. This paper provides novel contributions in both of these areas. We build a new comprehensive dataset of all French legislative and UK general elections over the 1993-2017 period. We propose new empirical specifications, including a new instrument that relies on the fact that candidates are differentially affected by regulation on the source of funding on which they depend the most. We find that an increase in spending per voter consistently improves candidates' vote share, both at British and French elections, and that the effect is heterogeneous depending on candidates' party. In particular, we show that spending by radical and extreme parties has much lower returns than spending by mainstream parties, and that this can be partly explained by the social stigma attached to extreme voting. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of why campaigns matter.
Keywords: Elections; Campaign Financing; Campaign Expenditures; Campaign Finance Reform; Multiparty Electoral Data; Heterogeneous Effects of Campaign Spending
JEL Codes: D72; P48; H7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increase in campaign spending per voter (K16) | significant improvement in candidates' vote shares (D79) |
| 1995 ban on corporate donations (G38) | drop in spending (D12) |
| drop in spending (D12) | weaker electoral performance (K16) |
| increase in spending by one party (E62) | detrimental impact on vote shares of competing parties (D72) |
| candidates who relied on corporate donations (D79) | weaker electoral performance (K16) |
| increase in campaign spending per voter (K16) | heterogeneous effects across parties (D79) |
| radical and extreme parties (D72) | lower returns on spending (E21) |
| social stigma associated with extreme voting (D72) | lower returns on spending for radical and extreme parties (D72) |