Money and Elections

What is the impact of Campaign Spending on Congressional Elections?

OUTLINE – Campaign Finance Where does the money come from? What is it spent on? How effective is that spending?

Where does the money come from? Major distinction is privately vs

publicly funded campaigns. In USA, Presidential

campaigns are publicly funded, campaigns in the HOR are privately funded.

Ostensibly, the reason for public funding is being able to control spending – so that one party doesn’t outstrip the other in terms of spending/support. See this in case of Ireland (Farrell & Webb; p115)

Can this only work in a two-party system though?

Origins of money cont.

Public Funding responsibilities Capped; way of controlling spending on elections Money must be accounted for (not unified reporting requirements) Jacobson posits that spending limits would reduce already abysmal

levels of competition (Jacobson; p336). But – why? Doesn’t it mean that the challenger cannot be outspent

before the election starts?

Private Funding responsibilities Money not have to be accounted for to same level in most countries Corporate or business donations often do need to be declared Federal spending benefits congressional incumbents: an additional $100 per

capita in spending is worth as much as 2 percent of the popular vote. (Levitt and Snyder; p31)

Origins of money cont.

The major features of the current laws for congressional elections: Individuals can contribute no more than $2,000 per candidate per

election cycle-$1,000 for the primary and $1000 for the general election.

Individual contributions are capped at $25,000 per calendar year. Political action committees (PACs) are restricted to $10,000 per

candidate per election cycle. PACS have no capped amount they can donate. Candidates are required to disclose all contributions and

expenditures over $200. There are no legal limits on how much a candidate may spend on

their campaign. There are no legal limits on the total amount that a candidate can

raise or spend; there is no public financing of campaigns. (Levitt; p184)

Origins of money cont.

Case Study: Internet Fundraising.

On 5 November 2007 Ron Paul raised US$4.3 million online; no major publicity, just announced on the website. He is polling at 2% among Republicans, who are polling at less than 35% nationwide.

Bob Dole had similar attempts at fundraising online in 1996.

Better for grassroots advocacy and fundraising? Actually help the newer candidates?

Origins of money cont.

Should election campaigns be publicly financed? What are the advantages of publicly financed elections? Should campaign spending be capped? What are the advantages of capping spending? Who should be allowed to contribute to campaigns? Should there be caps on campaign contributions?

What is the money spent on?

Farrell & Webb argue that campaign professionalisation has had a profound affect on spending, because the first revision of campaigns coincides with buying television time; reaching broader audiences. The second coincides with technology revolution of the 1990s, and the internet.

Media buys; television time in particular The internet is all three forms of communication, personal, group

and broadcast tool (Farrell & Webb; p110). Presumption that internet is revolutionary: or does it reinforce

existing structures, eg with fundraising, still largely about established candidates and parties.

Facebook and young voters. Free media slots.

Spending of money cont.

Another increasing expense are opinion polls, particularly in USA. However, Danish parties appear not to be taking advantage of this, being ideologically opposed to it (Farrell & Webb; p109), and Green parties, or smaller parties appear to have similar beliefs, in USA as well (Farrell & Webb; p109).

Paying staff: with campaigns becoming more professional, they come with staff

Spending of money cont.

Tight campaign limits stimulate aggressive advertising on the part of competing parties, while generous budgets often lead to parties acting defensively.

This explains increasingly partisan campaigns from Republicans and Democrats in recent elections: when there is polarization among non-committed voters, and campaign spending limits are higher, then parties by default return to their traditional constituencies. (Soberman & Sadoulet; p.1521–1532)

Decisions made based on budgets, and who to woo, rather than on policy. Closer to marketing now?

Another suggestion is that lack of competition in House elections stems from two factors: one increasing cost of HOR campaigns, and secondly declining capacity of challengers to raise these funds (Abramowitz; p34-6)

Spending of money cont.

“Not with my Money” Campaign – Australian case study

The Federal Government is tipped to spend $200 million on advertising this year alone – not even including their own election advertising!

"To all Australian politicians, I demand an end to the unchecked and undemocratic spending of my taxes on government advertising. I call on you to introduce into law strict guidelines enforced by an independent authority to ensure all publicly funded government advertising is for the legitimate dissemination of information; full disclosure requirements of the real campaign costs; and a cap on the amount a government can spend."

Spending of money cont.

Does spending of money matter more in a candidate based system rather than a party based system?

Is the equation of money with free speech in America a valid association?

Does big spending advantage particular parties (or incumbents?) eg GOP in America, traditionally wealthier supporter base?

Does big spending prevent the competition from third parties/small parties?

How effective is that spending? Modelling is problematic: ongoing debate about the model used

between Green & Kranso and Jacobson. Reason it remains problematic is because attempting to measure

the effect of objective stimulus on a subjective group which may or may not be rational; money spending may be objective, but trying to measure it’s effect on votes, when money not the only influence.

Also, presumption that money does mean votes: it means name recognition, and a corollary of that may be votes, but other factors to consider that can’t be measured: policy, likeability, quality of engagement with voters.

Jacobson the more traditional line of argument: spending by incumbents not always have a positive relationship to outcomes of elections, but do have the advantage going into it.

Kranso & Green argue that spending benefits incumbents as much as their opponents.

Effectiveness of spending cont. Jacobson argues that in campaigns against incumbents the more

the challenger spends, the more votes they receive and thus more likely to win. The more the incumbents spend, the less votes for the amount they spend and more likely to lose.

But, the stronger the challenger, the worse the incumbent does anyway, regardless of spending patterns.

Campaign spending may affect the vote, but the expected vote affects the contributions (Jacobson; p335)

“Low spending challengers begin behind and fall further behind, high spending challengers begin with a high level of support and add to it” (Jacobson; p350)

Trapped in a self-fulfilling cycle then? Does that explain non-competitive HOR races?

Effectiveness of spending cont. Is America a unique case or simply an exaggerated one? Is ad time the most effective use of campaign finances? Does incumbency matter? Do campaign contributions buy you policy? Does that defeat the

purpose of policy platforms in elections? Is it fair to accuse candidates of practically having ‘corporate

sponsorship’? Does that compromise the integrity of their representation?

BIBLIOGRAPHY

Abramowitz, Alan I. 1991. “Incumbency, Campaign Spending and the Decline of Competition in US House Elections” in Journal of Politics, Vol 53, No. 1, pp.34-56

Farrell, David M. and Paul Webb. 2000. "Political Parties as Campaign Organizations" in Partieswithout Partisans: Political Change in Advanced Industrial Democracies. pp. 102-128

Green, Donald P. and Kranso, Jonathan S. “Rebuttal to Jacobson’s ‘New Evidence for Old Arguments’” in American Journal of Political Science, Vol 34, No 2., pp.

Jacobson, Gary C. 1990. “The Effects of Campaign Spending in House Elections: New Evidence for Old Arguments” in American Journal of Political Science, Vol. 34, pp.334-62

Levitt, Steven, 1995. “Policy Watch: Congressional Campaign Finance Reform”, in The Journal of Economic Perspectives, Vol. 9., No. 1., pp. 183-93

Levitt, Steven and Snyder Jnr. James, M. 1997, “The Impact of Federal Spending on House Elections”, in The Journal of Political Economy, Vol. 105, No. 1, pp.30-53

Soberman, David and Sadoulet, Loic 2007, “Campaign Spending Limits and Political Advertising”, in Management Science, Vol 53, No 10, pp. 1521–1532