Political Campaign Spending Limits

*Tuvana Pastine
Dept. of Economics, National University of Ireland Maynooth

Ivan Pastine
School of Economics, UCD

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     Last modified: October 30, 2010
     Presentation date: 03/12/2011 10:45 AM in NH 1150, Session D
     (View Schedule)

Abstract
Political campaign spending ceilings are purported to limit the incumbent’s
ability to exploit his fundraising advantage. If the challenger does not have
superior campaign effectiveness, in contrast to conventional wisdom, we
show that the incumbent always benefits from a limit as long as he has an
initial voter disposition advantage, however small and regardless of the
candidates’ relative fundraising ability. If the challenger has higher campaign
spending effectiveness, the effect of limits may be non-monotonic. If the
incumbent enjoys a mild initial voter disposition advantage, a moderate limit
benefits the challenger. Further restricting the limit favours the incumbent.
Stricter limits may lead to the unintended consequence of increased expected
spending.