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The Economics of Election Campaign Spending Limits

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  • Filip Palda

    (Ecole nationale d'administration publique at Montreal)

Abstract

Spending limits are an important rule in the electoral game. Critics of limits claim that incumbents write these rules to keep down promising challengers. Their arguments are seductive but do not stand on a firm empirical base. The data seem quite eager to support or reject the critics' view, given the proper massaging. This paper suggests that if incumbents profit from spending limits, they will take their profit in a way that leaves no trace in the data. Profit does not come in the form of higher votes for the incumbent, but as richer government spoils for their close supporters. This explanation goes against the traditional view of how limits help incumbents. The explanation also helps to explain why there may never be a winner in the empirical debate on whether incumbents or challengers profit from limits.

Suggested Citation

  • Filip Palda, 2001. "The Economics of Election Campaign Spending Limits," Public Economics 0111011, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0111011
    Note: Type of Document - PDF; prepared on IBM PC ; to print on HP/PostScript; pages: 30; figures: included. PDF file may be viewed or printed
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/pe/papers/0111/0111011.pdf
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    References listed on IDEAS

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    1. Bender, Bruce, 1988. "An Analysis of Congressional Voting on Legislation Limiting Congressional Campaign Expenditures," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 1005-1021, October.
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    4. Chamberlain, Gary & Rothschild, Michael, 1981. "A note on the probability of casting a decisive vote," Journal of Economic Theory, Elsevier, vol. 25(1), pages 152-162, August.
    5. John Ledyard, 1984. "The pure theory of large two-candidate elections," Public Choice, Springer, vol. 44(1), pages 7-41, January.
    6. D. Usher & M. Engineer, 1987. "The distribution of income in a despotic society," Public Choice, Springer, vol. 54(3), pages 261-276, August.
    7. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
    8. Rebecca Morton & Charles Cameron, 1992. "Elections And The Theory Of Campaign Contributions: A Survey And Critical Analysis," Economics and Politics, Wiley Blackwell, vol. 4(1), pages 79-108, March.
    9. Roger Congleton, 1989. "Campaign finances and political platforms: The economics of political controversy," Public Choice, Springer, vol. 62(2), pages 101-118, August.
    10. Palda, Filip, 1993. "Can Repressive Regimes Be Moderated through Foreign Aid?," Public Choice, Springer, vol. 77(3), pages 535-550, November.
    11. K. Palda & Kristian Palda, 1985. "Ceilings on campaign spending: Hypothesis and partial test with Canadian data," Public Choice, Springer, vol. 45(3), pages 313-331, January.
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    Cited by:

    1. Thomas Sexton & Herbert Lewis, 2012. "Measuring efficiency in the presence of head-to-head competition," Journal of Productivity Analysis, Springer, vol. 38(2), pages 183-197, October.
    2. David Soberman & Loïc Sadoulet, 2007. "Campaign Spending Limits and Political Advertising," Management Science, INFORMS, vol. 53(10), pages 1521-1532, October.
    3. Filip Palda, 2001. "Election Finance Regulation in Emerging Democracies: Lessons from Canada and the U.S," Public Economics 0111010, University Library of Munich, Germany.

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    More about this item

    Keywords

    Campaign spending spending limits; election finance regulation; economics of information;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • K39 - Law and Economics - - Other Substantive Areas of Law - - - Other

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