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Contribution limits and the effectiveness of campaign spending


  • Thomas Stratmann



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

Suggested Citation

  • Thomas Stratmann, 2006. "Contribution limits and the effectiveness of campaign spending," Public Choice, Springer, vol. 129(3), pages 461-474, December.
  • Handle: RePEc:kap:pubcho:v:129:y:2006:i:3:p:461-474
    DOI: 10.1007/s11127-006-9066-4

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    References listed on IDEAS

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    14. 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.
    15. 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.
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    Cited by:

    1. Ade, Florian & Freier, Ronny & Odendahl, Christian, 2014. "Incumbency effects in government and opposition: Evidence from Germany," European Journal of Political Economy, Elsevier, vol. 36(C), pages 117-134.
    2. Stephen Coate, 2004. "Pareto-Improving Campaign Finance Policy," American Economic Review, American Economic Association, vol. 94(3), pages 628-655, June.
    3. Corinna Ahlfeld, 2010. "Reputation Sells -Compensation Payments in the Political Sphere," Departmental Discussion Papers 145, University of Goettingen, Department of Economics.
    4. Köppl-Turyna, Monika, 2014. "Campaign finance regulations and policy convergence: The role of interest groups and valence," European Journal of Political Economy, Elsevier, vol. 33(C), pages 1-19.
    5. Thomas Stratmann, 2009. "How prices matter in politics: the returns to campaign advertising," Public Choice, Springer, vol. 140(3), pages 357-377, September.
    6. Ronny Freier & Sebastian Thomasius, 2016. "Voters prefer more qualified mayors, but does it matter for public finances? Evidence for Germany," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(5), pages 875-910, October.
    7. 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.
    8. Freier, Ronny, 2015. "The mayor's advantage: Causal evidence on incumbency effects in German mayoral elections," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 16-30.
    9. Ivan Pastine & Tuvana Pastine, 2009. "Caps on political contributions, monetary penalties and politician preferences," Working Papers 200912, School of Economics, University College Dublin.
    10. Stephen Coate, 2003. "Power-hungry Candidates, Policy Favors, and Pareto Improving Campaign Finance Policy," NBER Working Papers 9601, National Bureau of Economic Research, Inc.
    11. Callahan, Scott, 2016. "The Impact of Agricultural Political Action Committee Donations on Repeated Farm Bill Votes," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235558, Agricultural and Applied Economics Association.
    12. 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.
    13. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July.
    14. 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.

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