DP12614 The Heterogeneous Price of a Vote: Evidence from France, 1993-2014

Author(s): Yasmine Bekkouche, Julia Cagé
Publication Date: January 2018
Date Revised: July 2019
Keyword(s): Campaign expenditures, Campaign finance reform, Campaign financing, elections, Heterogeneous effects of campaign spending, Multiparty electoral data
JEL(s): D72, H72, P48
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12614

What is the impact of campaign spending on votes? Does it vary across election types and across political parties? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that successfully deal with the endogeneity of campaign spending. We provide novel contributions in both of these areas. We build a new comprehensive dataset of all French municipal and legislative elections over the 1993-2014 period. We propose two new instruments to overcome the endogenous nature of campaign spending; they rely on the fact that candidates are differentially affected by regulation on campaign funding depending on the source of funding they depend on the most. We find that an increase in spending per voter consistently increases a candidate's vote share both for municipal and legislative elections, and that the effect is heterogeneous depending on the party. In particular, we show that spending by extreme-right candidates has much lower returns than spending by other parties. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of the mechanisms at play.