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Incumbency advantage and political campaign spending limits

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  • Pastine, Ivan
  • Pastine, Tuvana

Abstract

This paper presents a model which captures the three main arguments for and against campaign spending limits. Campaign spending limits are purported to restrict the incumbent's ability to exploit his fundraising advantage. In contrast to conventional wisdom, a ceiling increases the incumbent's probability of victory regardless of the candidates' relative fundraising abilities as long as the challenger is not more effective in campaign spending. If the challenger is more effective in campaign spending, ceilings have a non-monotonic effect when the incumbent enjoys a mild initial voter disposition advantage; A moderate ceiling decreases the incumbent's probability of victory but further restricting the limit favors the incumbent. Irrespective of incumbency status, the marginal benefit to quality decreases with a more restrictive cap. In an open-seat contest, a more restrictive limit improves the electoral prospects of the superior quality candidate. Stricter ceilings may lead to the unintended consequence of increased expected spending.

Suggested Citation

  • Pastine, Ivan & Pastine, Tuvana, 2012. "Incumbency advantage and political campaign spending limits," Journal of Public Economics, Elsevier, vol. 96(1), pages 20-32.
  • Handle: RePEc:eee:pubeco:v:96:y:2012:i:1:p:20-32
    DOI: 10.1016/j.jpubeco.2011.07.002
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    Cited by:

    1. Eric Avis & Claudio Ferraz & Frederico Finan & Carlos Varjão, "undated". "Money and Politics: The Effects of Campaign Spending Limits on Political Competition and Incumbency Advantage," Textos para discussão 656, Department of Economics PUC-Rio (Brazil).
    2. Boyer, Pierre C. & Konrad, Kai A. & Roberson, Brian, 2017. "Targeted campaign competition, loyal voters, and supermajorities," Journal of Mathematical Economics, Elsevier, vol. 71(C), pages 49-62.
    3. David K. Levine & Andrea Mattozzi, 2022. "Success in contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 73(2), pages 595-624, April.
    4. Aragonès, Enriqueta & Xefteris, Dimitrios, 2017. "Voters' private valuation of candidates' quality," Journal of Public Economics, Elsevier, vol. 156(C), pages 121-130.
    5. J. Zachary Klingensmith, 2019. "Using tax dollars for re-election: the impact of pork-barrel spending on electoral success," Constitutional Political Economy, Springer, vol. 30(1), pages 31-49, March.
    6. Bettina Klose & Dan Kovenock, 2015. "The all-pay auction with complete information and identity-dependent externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(1), pages 1-19, May.
    7. Qiang Fu & Jingfeng Lu, 2020. "On Equilibrium Player Ordering In Dynamic Team Contests," Economic Inquiry, Western Economic Association International, vol. 58(4), pages 1830-1844, October.
    8. Dimitrios Xefteris, 2018. "Candidate valence in a spatial model with entry," Public Choice, Springer, vol. 176(3), pages 341-359, September.
    9. Matthew T. Cole & Ivan Pastine & Tuvana Pastine, 2018. "Incumbency Advantage in an Electoral Contest," The Economic and Social Review, Economic and Social Studies, vol. 49(4), pages 419-436.
    10. Prato, Carlo & Wolton, Stephane, 2014. "Electoral Imbalances and their Consequences," MPRA Paper 68650, University Library of Munich, Germany, revised 26 Nov 2015.
    11. David Bruner & Caleb Cox & David M. McEvoy & Brock Stoddard, 2022. "Strategic thinking in contests," Experimental Economics, Springer;Economic Science Association, vol. 25(3), pages 942-973, June.
    12. HHironori Otsubo, 2012. "Contests with Incumbency Advantages: An Experiment Investigation of the Effect of Limits on Spending Behavior and Outcome," Jena Economic Research Papers 2012-020, Friedrich-Schiller-University Jena.
    13. Enriqueta Aragonès & Dimitrios Xefteris, 2017. "Imperfectly Informed Voters And Strategic Extremism," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(2), pages 439-471, May.
    14. Pau Balart & Agustin Casas & Orestis Troumpounis, 2019. "Technological change, campaign spending and polarization," Working Papers 269238020, Lancaster University Management School, Economics Department.
    15. Jan Brueckner & Kangoh Lee, 2015. "Negative campaigning in a probabilistic voting model," Public Choice, Springer, vol. 164(3), pages 379-399, September.
    16. Ercio Andres Munoz, 2021. "Incumbency advantage, money, and campaigns: A note on some suggestive evidence from Chile," Economics Bulletin, AccessEcon, vol. 41(3), pages 1203-1211.
    17. Hideo Konishi & Chen-Yu Pan, 2020. "Silent promotion of agendas: campaign contributions and ideological polarization," Public Choice, Springer, vol. 182(1), pages 93-117, January.
    18. Hideo Konishi & Chen-Yu Pan, 2017. "Campaign Contributions for Free Trade: Salient and Non-salient Agendas," Boston College Working Papers in Economics 926, Boston College Department of Economics.
    19. Lu, Jingfeng & Wang, Zhewei & Zhou, Lixue, 2022. "Optimal favoritism in contests with identity-contingent prizes," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 40-50.
    20. Derek J. Clark & Tore Nilssen, 2022. "Fatter or fitter? On rewarding and training in a contest," Economic Inquiry, Western Economic Association International, vol. 60(1), pages 101-120, January.
    21. Ivan Pastine & Tuvana Pastine, 2013. "Soft Money And Campaign Finance Reform," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(4), pages 1117-1131, November.
    22. Rubén Poblete Cazenave, 2021. "Reputation Shocks and Strategic Responses in Electoral Campaigns," Tinbergen Institute Discussion Papers 21-049/V, Tinbergen Institute.
    23. David K. Levine & Andrea Mattozzi, 2022. "Success in contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 73(2), pages 595-624, April.
    24. Pau Balart & Agustín Casas & Orestis Troumpounis, 2022. "Technological Change, Campaign Spending and Polarization," Working Papers 105, Red Nacional de Investigadores en Economía (RedNIE).
    25. Gisèle Umbhauer, 2019. "Second-Price All-Pay Auctions and Best-Reply Matching Equilibria," Post-Print hal-03164468, HAL.

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    More about this item

    Keywords

    Campaign finance legislation; Spending cap; Expenditure limit; Preferential treatment all-pay auction; Contest; Head-start advantage;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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