Campaign Spending in Congressional Elections

By Banaian, King; Luksetich, William A. | Economic Inquiry, January 1991 | Go to article overview

Campaign Spending in Congressional Elections


Banaian, King, Luksetich, William A., Economic Inquiry


CAMPAIGN SPENDING IN CONGRESSIONAL ELECTIONS

I. INTRODUCTION

Empirical studies of the effects of campaign spending on the outcome of Congressional elections have found that campaign spending by incumbents is not as effective as that of their challengers. Indeed, Kau and Rubin [1982! and Jacobson [1985 1987! find that incumbent spending reduces the number of votes they receive and Netter [1983! that it increases the challenger's votes. Incumbents seeking reelection, however, are very successful, winning nine times out of ten in the postwar era. If their campaign spending is so inefficient, why do incumbents continue to outspend their challengers in a majority of elections?

We argue that these researchers counterintuitive findings are the result of using models which do not adequately correct for the simultaneous determination of the election outcome and campaign contributions, and which do not include an electoral check on incumbent behavior. (1) In their studies Jacobson and Netter, as well as Lott [1986! and Laband and Lentz [1985!, assume the incumbent's ability to repel challengers is independent of his or her behavior while in office. Few would agree that the electoral check is so ineffective. We develop a simultaneous model to correct these deficiencies. It captures the effects of campaign expenditures, tenure, the consistency of the incumbent's votes with his constituents' preferences, and the size of the voter turnout on the votes received by incumbents and challengers in four congressional elections between 1978 and 1984. The model is very robust over these four elections. The use of primary election data insures model

identification.

II. MODEL AND EMPIRICAL MEASURES

We assume that the platforms of any two candidates for a political office can be measured along a single left-right spectrum. Voters know their preferred position on the dimension but cannot observe the positions of the two candidates with certainty because of rational ignorance, a theory accepted since Downs [1957!. Following Congleton [1986!, we assume voters are risk-averse and receive more utility from candidates with positions closer to the voters' preferred position, but lose utility as the candidate's position becomes more uncertain. Voters compare the candidates and vote for the one that provides them greater expected utility.

Voters can observe the incumbent's performance and are thus less uncertain of his views and credibility. Uncertainty should decrease with an incumbent's tenure in office. Tenure provides voters with knowledge of the incumbent's position and the incumbent with political capital. This accumulation of political capital may make it more difficult for challengers to mount a successful campaign. In this sense, tenure acts as a barrier to entry. (2)

If all incumbents were at the same point on the spectrum as the median voter of their districts, all incumbents would win reelection. If all potential challengers were aware of this fact, they would not challenge since campaigns are costly. But one observes many challengers and some defeated incumbents. So we proceed from the hypothesis that challengers enter the race when they perceive a gap between the position of the incumbent and that of the median voter and assume this position as their platform. A large difference between the incumbent's position and the median voter's position increases the likelihood of a successful challenge. If voters were certain of the positions of both candidates, and the challenger's assessment was correct, the challenger would win.

But challengers are usually less well known than incumbents, and this additional uncertainty gives incumbents an advantage. Thus the challenger must convince the voters that his or her position is closest to the median voter's position, and advertising is the primary means to that end. (3) Repetition of the message reduces the voters' uncertainty over a challenger's position. …

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