Does Money Affect Election Outcomes in US Politics? A Quick Review of the Literature

Yesterday I addressed the question of whether Obama was actually having trouble raising money for his 2012 re-election campaign. This of course begs a larger question: how much does campaign spending actually affect election outcomes in US politics? I put this question to Andrew Therriault, a post-doctoral fellow at Vanderbilt University and an expert on campaign effects.

Q: (me) What are the basic conclusions of the literature regarding overall spending in US elections?

A: (Therriault): With regard to overall spending, Jacobson (1978) was the first to show an effect on vote outcomes, but this effect was mainly present for challengers [in Congressional elections]. In subsequent years, the effect of challenger spending was confirmed, but others also found effects for incumbent spending as well (e.g. Green & Krasno 1988, Erikson & Palfrey 1995, Gerber 1998). The basic takeaway is that spending more is clearly effective for challengers, probably also matters for incumbents too, but solving the causal direction problems involved is makes it very difficult to be really certain of any of these findings.

One problem is we know that winning candidates generally have more money, but whether money helps candidates or is just a signal of unobserved candidate quality [i.e., people give more money to better candidates] is unclear. Another problem is that not only are donors attracted to high-quality candidates just as voters are, but they are also attracted to winning candidates—that is, if money is given in order to get access to elected officials, donors are more likely to give to candidates who are expected to do well, because the expected return is greater. In both cases, we could observe an empirical relationship between winning and having more money for your campaign, without the money actually “causing” the victory.

Q: What about deterrence? Can high levels of fund raising by incumbents deter challengers from entering a race?

A: Again, the evidence is mixed. While Krasno & Green (1988) and Goodliffe (2001) find no effect on deterring entry, Epstein (1995) develops a model showing cases where war chests should deter but that these are very rare, and Box-Steffensmeier (1996) does find an effect. The takeaway: there is no consensus in the literature regarding deterrence, and once again there are major questions about causal relationships (i.e., do high-raising incumbents deter, or is it just high-quality incumbents who can raise a great deal or money and simultaneously deter quality challengers for reason having nothing to do with funding?).

Q: Most of these citations seem to be at least 10 years old. What has been going on in this literature more recently?

A: More recently, fewer people have been looking at spending as a whole. Instead, the more recent focus has been on seeing how money affects votes, through campaign advertising [JT: interested readers can see Therriault’s work on this subject, both for its own sake but also for lit reviews] and mobilization efforts (e.g., work by Alan Gerber and Don Green and colleagues) in particular. What we’ve learned is that ads appear to be somewhat effective but have wide variance in effectiveness (that is, some ads help a lot, most help very little or not at all, and a few are counterproductive), while mobilization efforts appear to be effective but costly (face-to-face canvassing most effective by far, while phone calls & direct mail have much less effect).

Q: So the overall bottom line is?

A: Candidates who raise a lot of money tend to do better, and it’s more likely than not that at least part of this relationship is due to money paying for things like ads and canvassers that help candidates win over new voters and/or turn out their bases. High-quality challengers may be deterred by large war chests, but other factors such as local political conditions and incumbent quality are more important: in most cases, a much-despised incumbent with a lot of money is in a worse position than a much-liked incumbent with very little money.


[NB: If you enjoyed Andrew’s insights here, he is currently on the academic job market…]

[Cross-posted at The Monkey Cage]

Joshua Tucker

Joshua Tucker is a Professor of Politics at New York University.