DP15150 The Heterogeneous Price of a Vote: Evidence from Multiparty Systems, 1993-2017

Author(s): Yasmine Bekkouche, Julia Cagé, Edgard Dewitte
Publication Date: August 2020
Keyword(s): Campaign expenditures, Campaign finance reform, Campaign financing, Elections, Heterogeneous effects of campaign spending, Multiparty electoral data
JEL(s): D72, H7, P48
Programme Areas: Public Economics, Economic History
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15150

What is the impact of campaign spending on votes? Does it vary across election types, political parties or electoral settings? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that handle the endogenous and strategic nature of campaign spending in multiparty systems. This paper provides novel contributions in both of these areas. We build a new comprehensive dataset of all French legislative and UK general elections over the 1993-2017 period. We propose new empirical specifications, including a new instrument which relies on the fact that candidates are differentially affected by regulation on the source of funding on which they depend the most. We find that an increase in spending per voter consistently improves candidates' vote share, both at British and French elections, and that the effect is heterogeneous depending on the party. In particular, we show that spending by far-right candidates has much lower returns than spending by other parties, and that this can be partly explained by the social stigma attached to far-right voting. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of why campaigns matter.