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Financing Direct Democracy: Revisiting the Research on Campaign Spending and Citizen Initiatives

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  • John M. de Figueiredo
  • Chang Ho Ji
  • Thad Kousser

Abstract

The conventional view in the direct democracy literature is that spending against a measure is more effective than spending in favor of a measure, but the empirical results underlying this conclusion have been questioned by recent research. We argue that the conventional finding is driven by the endogenous nature of campaign spending: initiative proponents spend more to support their ballot measure when, without that spending, their ballot measure is more likely to fail. We address this endogeneity by using an instrumental variables approach to analyze a comprehensive data set of ballot propositions in California from 1976 to 2004. We find that both support and opposition spending on citizen initiatives have strong, statistically significant, and countervailing effects. We confirm this finding by looking at time series data from early polling on a subset of these measures. Both analyses show that spending in favor of citizen initiatives substantially increases their chances of passage, just as opposition spending decreases this likelihood. The Author 2011. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oup.com, Oxford University Press.

Suggested Citation

  • John M. de Figueiredo & Chang Ho Ji & Thad Kousser, 2011. "Financing Direct Democracy: Revisiting the Research on Campaign Spending and Citizen Initiatives," Journal of Law, Economics, and Organization, Oxford University Press, vol. 27(3), pages 485-514.
  • Handle: RePEc:oup:jleorg:v:27:y::i:3:p:485-514
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    File URL: http://hdl.handle.net/10.1093/jleo/ewr007
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    Cited by:

    1. Yasmine Bekkouche & Julia Cage, 2018. "The Price of a Vote: Evidence from France, 1993-2014," Working Papers Series 68, Institute for New Economic Thinking.
    2. Yasmine Bekkouche & Julia Cage & Edgard Dewitte, 2020. "The Heterogeneous Price of a Vote: Evidence from Multiparty Systems, 1993-2017," Sciences Po publications 2020-07, Sciences Po.
    3. Yasmine Bekkouche & Julia Cage, 2019. "The Heterogeneous Price of a Vote: Evidence from France, 1993-2014," Sciences Po publications 2019-09, Sciences Po.
    4. Leyla D. Karakas, 2018. "Appeasement and compromise under a referendum threat," Economics of Governance, Springer, vol. 19(3), pages 261-283, August.

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