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Incumbency advantage and political campaign spending limits

Ivan Pastine and Tuvana Pastine

Journal of Public Economics, 2012, vol. 96, issue 1, 20-32

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.

Keywords: Campaign finance legislation; Spending cap; Expenditure limit; Preferential treatment all-pay auction; Contest; Head-start advantage (search for similar items in EconPapers)
JEL-codes: D72 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:96:y:2012:i:1:p:20-32

DOI: 10.1016/j.jpubeco.2011.07.002

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