Andrew B. Hall (Harvard University - Department of Government) has posted Aggregate Effects of Campaign Spending on SSRN. Here is the abstract:
-
Defying conventional wisdom, political scientists tend to believe that money has little effect on elections in equilibrium. However, this effect is usually defined at the level of the individual campaign. Because campaigns produce externalities for neighboring campaigns – through shared media markets, cooperative campaigning, the common signal value of the candidate’s party, etc. – campaign contributions may have a larger effect at the legislature level. Using corporate contribution bans in state legislatures to obtain exogenous variation in the share of campaign contributions flowing to the party, I show that campaign spending significantly increases that party’s electoral fortune. An increase of 10 percentage-points in the share of all contributions going to one party is estimated to cause a 4.5 percentage-point increase in that party’s seat share in state senates. The results suggest that campaign spending matters, and that more attention should be paid to campaign effects at the level of the legislature, rather than only at the level of the race.
