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Contribution limits and the effectiveness of campaign spending

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  • Thomas Stratmann

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Abstract

Much work on the apparent ineffectiveness on incumbent spending in congressional elections has hypothesized that the productivity of incumbent spending is low because incumbents operate on the “flat part” of their election returns function. Differences in campaign spending associated with state campaign finance laws allows for a test of this hypothesis because restrictions on campaign contributions tend to reduce campaign spending. Exploiting cross-state variation in campaign finance laws, this study tests whether campaign expenditures by state House candidates are more productive when candidates are subject to contribution limits. The results show that campaign expenditures by incumbents and challengers are more productive when candidates run in states with campaign contribution limits, as opposed to in states without limits. In states with contribution limits, incumbent spending and challenger spending are equally productive, and spending by both candidates is quantitatively important in increasing their vote shares. Copyright Springer Science+Business Media B.V. 2006

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 129 (2006)
Issue (Month): 3 (December)
Pages: 461-474

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Handle: RePEc:kap:pubcho:v:129:y:2006:i:3:p:461-474

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Web page: http://www.springerlink.com/link.asp?id=100332

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  1. Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753, October.
  2. Coates, Dennis, 1998. " Additional Incumbent Spending Really Can Harm (at Least Some) Incumbents: An Analysis of Vote Share Maximization," Public Choice, Springer, vol. 95(1-2), pages 63-87, April.
  3. Jeffrey Milyo, 1997. "The economics of political campaign finance: FECA and the puzzle of the not very greedy grandfathers," Public Choice, Springer, vol. 93(3), pages 245-270, December.
  4. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  5. Thomas Stratmann & Francisco J. & Aparicio-Castillo, 2006. "Competition policy for elections: Do campaign contribution limits matter?," Public Choice, Springer, vol. 127(1), pages 177-206, April.
  6. Stratmann, Thomas, 1995. "Campaign Contributions and Congressional Voting: Does the Timing of Contributions Matter?," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 127-36, February.
  7. Stratmann, Thomas, 2002. "Can Special Interests Buy Congressional Votes? Evidence from Financial Services Legislation," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 345-73, October.
  8. Daniel Houser & Thomas Stratmann, 2008. "Selling favors in the lab: experiments on campaign finance reform," Public Choice, Springer, vol. 136(1), pages 215-239, July.
  9. Milyo, Jeffrey & Groseclose, Timothy, 1999. "The Electoral Effects of Incumbent Wealth," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 699-722, October.
  10. Prat, Andrea, 2002. "Campaign Spending with Office-Seeking Politicians, Rational Voters, and Multiple Lobbies," Journal of Economic Theory, Elsevier, vol. 103(1), pages 162-189, March.
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Citations

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Cited by:
  1. Daniel Houser & Thomas Stratmann, 2008. "Selling favors in the lab: experiments on campaign finance reform," Public Choice, Springer, vol. 136(1), pages 215-239, July.
  2. Ivan Pastine & Tuvana Pastine, 2010. "Politician preferences, law-abiding lobbyists and caps on political contributions," Public Choice, Springer, vol. 145(1), pages 81-101, October.
  3. Thomas Stratmann, 2009. "How prices matter in politics: the returns to campaign advertising," Public Choice, Springer, vol. 140(3), pages 357-377, September.
  4. Tomer Blumkin & Volker Grossmann, 2010. "May increased partisanship lead to convergence of parties’ policy platforms?," Public Choice, Springer, vol. 145(3), pages 547-569, December.
  5. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July.
  6. Stephen Coate, 2004. "Pareto-Improving Campaign Finance Policy," American Economic Review, American Economic Association, vol. 94(3), pages 628-655, June.
  7. Ivan Pastine & Tuvana Pastine, 2009. "Caps on Political Contributions, Monetary Penalties and Politician Preferences," Working Papers 200912, School Of Economics, University College Dublin.
  8. Corinna Ahlfeld, 2010. "Reputation Sells -Compensation Payments in the Political Sphere," Departmental Discussion Papers 145, University of Goettingen, Department of Economics.
  9. Stephen Coate, 2003. "Power-hungry Candidates, Policy Favors, and Pareto Improving Campaign Finance Policy," NBER Working Papers 9601, National Bureau of Economic Research, Inc.

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