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It’s been a couple of weeks since the parliamentary report on medically-assisted dying was released.  Andrew Coyne has IMO written some pretty perceptive columns on the the topic; for example, he accurately foresaw the impossibility of limiting medically-assisted death to … Continue reading

Show me the money! (part 3 – finale)

So far in this series of posts I have 1) explained the limits on campaign fund-raising and spending that the Canada Elections Act imposes on parties and local constituency associations and candidates; and 2) looked at the parties’ revenues.  Today I am writing on what political scientists know about the impact of campaign spending.

Let’s first consider why the impact of money on votes is important.  There are two dominant concerns: 1) There is a direct concern that money allows those with deep-pockets to buy elections in a way that subverts the political equality of citizens on which democracy is based. 2) There is also an indirect concern that if money is crucial to winning elections, then politicians will have to curry favour with financial backers.  In effect, we (the citizens) have to worry about politicians selling access and favours to their financial backers.  If we took a “systems” view of the political process a la Easton, then we might say that the direct effect of money on politics distort the electoral demands of citizens, which constitute the main inputs of the political process, whereas the indirect effect of money on politics is to distort the nature of public policy, which constitute the main output of the political process.

It being the end of the second longest and highest spending Canadian election campaign, I am going to concentrate on the first of these effects, that is, the effect of money on election outcomes.  I looked at perhaps 20-30 journal articles on campaign spending, and what struck me is how little empirical evidence there is that money obviously distorts election outcomes.  The only article I found that concludes that money unambiguously narrows the scope of representational interests was David Samuels’ (LAPS 2001 [43: 27-48]) piece on campaign spending in Brazil.  Samuels shows that Brazilian election campaigns are enormously expensive, funded mainly by corporate rather than individual donation, leaving leftist parties and candidates (who cannot by law solicit money from unions) at a significant financial disadvantage — and this matters because spending is highly correlated to winning in Brazil.

Against Samuels piece are perhaps dozens that conclude – perhaps surprisingly – that to the extent that campaign spending matters, it consistently favours challengers not incumbents!  This puzzling result originates in Gary Jacobson’s 1978 APSR [72:469-491] paper on campaign spending in US Congressional elections.  Jacobson’s main result was that 1) there was a positive relationship between spending and vote % and the probability of winning, but that 2) this advantage was enjoyed by challengers not incumbents. Jacobson’s paper was very influential (690 google citations & probably lots more in total). And normatively it implies that we should be careful about limiting campaign spending because if we do, we’re probably weakening challengers, strengthening incumbents, and generally undercutting political competition.

But what’s especially puzzling about Jacobson’s result (as he himself noted in a later piece (Public Choice 1985 [47: 7-62]) is that it’s not as if droves of US Congressional incumbents were falling at the hands of free spending challengers; on the contrary, from the 1970s onward, US Congressional incumbents were increasingly likely to secure re-election.  A number of scholars – Green and Kranso chief among them (AJPS 1988 [32:884-907]) – pointed to an obvious endogeneity problem in Jacobson’s research design that might explain the non-effect of incumbent spending:  incumbents’ spending is endogenous to the strength of the challenger they confront: strong incumbents don’t generally face strong challengers (who can do better by preying on more vulnerable incumbents), and so they need not spend heavily to defeat their weaker challengers (who have a tough time raising a lot of money because of their widely perceived weakness).* Once one statistically corrects for this endogeneity problem, incumbent spending seems to matter (i.e., it increases vote share and the probability of winning).

But… but… well, two things.  Firstly, Jacobson (AJPS 1990[34: 334-362) disputed the quality of instruments that Green and Kranso employed… it’s all endogenous, folks! Secondly, Jacobson’s result has proven to be pretty robust in a variety of settings even when researchers have taken care to instrument for challenger quality: Johnston, Fieldhouse, and Pattie (AJPS 1995 [89: 969-983]** find that constituency-level spending in UK elections is associated with increased support for the spending party, but this effect is greater for challengers; Palda and Palda (Public Choice 1998 [94: 157-174]) find that the marginal effect of money on vote shares was twice as great for challengers at French legislative elections as for incumbents; Benoit and Marsh (Party Politics 2003 [9: 561-582]) find a similar result for Irish local elections held under STV and at Irish general elections (AJPS 2008 [52: 874-890]), and Eagles (CdnPP 1993 [19:432-449]) finds a similar result for Canadian general elections. Certainly, these same papers (and many more) show that the differential in the effectiveness of challenger and incumbent spending declines once one controls for challenger quality, but the regularity of the result suggests that the dynamics of campaign spending are fundamentally different for challengers than incumbents… and it seems to suggest, in consequence, that campaign spending limits would largely have the effect of protecting incumbents.  That’s kind of unsettling as it would seem to suggest the normative superiority of high spending US-style elections… but that just seems wrong-headed because 1) empirically, legislative turnover is a lot higher in other countries where much lower spending limits are stringently enforced, and 2) it really does seem (well, this is my jaded view, I guess) that every US MOC is bought and paid for.  What’s that line?.. “An honest politician is one who, once bought, stays bought.”

As you can imagine, a good deal of effort has gone into trying to explain this result.  So what are some explanations.  Jacobson himself advanced a couple arguments:  1) money buys name recognition; incumbents already have that, and so the marginal effect of incumbent spending is obviously going to be lower; 2)and, focussing on survey data of voters’ vote intentions, Jacobson (AJPS 1990 [34] 334-362) argues that there is a strong positive relationship between challenger spending and the voter’s propensity to change their vote intention from the incumbent (or neutrality) to the challenger.  To some extent, incumbent spending offsets this desertion of support, but the incumbent is more vulnerable to desertion because the incumbent starts with the larger (hence less loyalist) base of support (i.e., the incumbent won previously by attracting support which drains away by a challenger spending induced regression-to-the-mean).   This could also be an equilibrium result:  on average, weaker (hence vulnerable) incumbents are taken on by stronger challengers; the marginal effect of spending of the weak incumbent and strong challenger then reflects the underlying quality of the contestants rather that the marginal effect of money on votes per se.  Finally, Benoit and Marsh (AJPS 2008 [52: 874-890]) suggest that incumbents just don’t have to spend so much “hard” money because their offices give them access to alternative resources (e.g., franking, travel budgets, a constituency office & staff).  Exploiting an Irish High Court ruling that these trappings of office represented campaign funds – and hence had to be monetized, they show that incumbent spending is pretty effective. Tangentially, there’s another line of literature that suggests all the (negative) advertising that this money is spent on does not obviously boost or suppress turnout (see, e.g., Goldstein and Freedman (JOP 2000 [62])

So what does all this suggest? Well, I started off by relating a result (from Brazil) that essentially confirms our worst fears about the role of money in elections (i.e., that it gives the rich undue voice).  That result is not directly relevant to elections in advanced democracies (why not, see below), but it ought not to be overlooked.  We should consider it in view of the fact that the results from the Jacobson-line of research are all from places where 1) both incumbents and challengers have access (even if not equal) to resources;  and 2) where there exist many private individuals who can donate those resources (as opposed to just a few large donors).   Those two factors appear sufficient to generate a situation where the influence of money on elections is not totally one-sided in favour of incumbents.  (Just look at legislative turnover rates in Canada over the long run.) To the extent campaign finance rules in Canada have curbed corporate donation in favour of individual donations, the situation appears pretty satisfactory.  Further, the imbalance in revenues between the rich Tories and less wealthy Liberals and NDP ought not to be of great concern: the gap is not huge, and research suggests that Liberal and NDP dollars will have a much larger marginal effect than Tory spending in this election.   Certainly, the Jacobson-like results suggest we probably don’t want to push down campaign spending limits to the point where incumbents’ advantage from office (which Benoit and Marsh show is real) is decisive in elections. Equally, if state funding just works to increase all parties’ budgets, it won’t really alter the fundamental dynamics of how money effects elections***… so much money is spent for little effect, i.e., it’s inefficient.

*There’s another endogeneity problem: incumbents do not stand for re-election at random; those truly at risk of defeat tend to resign rather than fight hopeless re-election campaigns.

** Kudos to Johnston, who looks to have published essentially the same paper in, Johnston and Pattie, Party Politics 1995 [1:261-73].  Behind most lengthy academic CVs lies a lot of salami-sliced results judiciously packaged into N+1 journal articles, where the +1 stands for “one too many”!

***Recall, we get the Jacobson-result in low-spending Irish local elections, in France and Canada, where spending limits are stringent, at modest-spending Irish general elections, where no limits exist, and in high-spending US election. So it looks like the dynamic is independent of spending levels.




Some quick hit thoughts (some related to the election, some not)

  1. Sweden’s December Agreement has collapsed.  The government looks like it will be able to survive by relying on a lack of coordination and co-operation among the Right Bloc parties.  But as I noted a while back, there would be significant pressure on the Right Bloc parties to start staking out clear positions on immigration or risk losing votes to the Swedish Democrats.  And lo it has come to pass, with the Moderates urging a tougher immigration policy. I think this whole episode is fascinating.  I’ll have to discuss it further.
  2. Homer-Dixon has a column in the Lunch & Pail on how the Conservatives pushing of the niqab issue damaged the NDP to the extent that progressive voters could clearly coordinate on the Liberals as the best alternative to Harper.  Two thoughts: a) H-D argues that making the niqab an issue was a monumental blunder because it worked to break the coordination problem on the left.  But really, that was an unintended consequence; you can’t judge the rationality of the action on the basis of ex post outcomes.  Ex ante the Tories were looking at a bunch of polls that showed 70% of Canadian agreed with them on the issue.  How often do you see majorities that size?! And if both The Spaniel and Mulcair disagreed with the Tories’ stance on the issue , why, ex ante, would the Tories see this as an issue that would upset the coordination problem on the left? b) Funny, but I pushed this same thesis to my colleague, Fred Cutler, in the hallway at work the other day.  Fred led me back to his computer and made a pretty persuasive pitch that the NDP slide did not start with the niqab but before.  Perhaps, the Liberal leap-frog of the NDP on deficit spending was a stroke of genius?  Really, I don’t care:  I’m a legislative scholar; elections are just things that periodically shift parties’ bargaining power.
  3. But let’s do pity, Tom Mulcair: he’s been a principled adult though this whole affair, and he’s very likely to lose his job.  I do not see the NDP backbench and base taking this defeat well.  The move to the centre was supposed to deliver victory; it failed.  I predict a lurch to the left, with somebody like, say, Olivia Chow(?) as leader.  Naomi Klein would be my preferred choice as successor, however.  What can I say, I like watching train wrecks.
  4. It looks like we are heading toward a minority government w. the Spaniel as PM.  Two good things about the Spaniel’s coronation:
    1.  I get to call him “The Spaniel”. In deference to the office, I will capitalize “The” and “Spaniel”.
    2. Canada is truly the land of opportunity: having no intelligence to speak of (or none at all even) is no barrier to the highest office in the land. (I mean even Bob Rae noted on the CBC that “well, sure, he’s not the smartest guy in the room”… Wow.)  Let’s be optimistic.  What did Oliver Wendell Holmes say about Roosevelt:  secondclass intellect but a firstclass temperament. Sure, we’ll have to substitute for “second-class”… “third”, “lower”, “economy”?
    3. Question Period should be a hoot!  Jason Kenney, Naomi Klein, and The Spaniel… imagine. 

…and people say I’m cynical. Me?!  OK, next 2 posts will be a serious again.  I’ll  consider two questions: 1) what does all that campaign spending do? 2) what is the nature of minority government?

Show me the money (part 2)

Wow, long hiatus from blogging.  Due to 1) start of the semester; 2) new classes; 3) onerous service obligations of the sort that the modern university (and UBC, especially) seems to specialize in; and 4) the start of cyclocross season (I suck! I am regularly “caboosing” in the masters class – no bike-handling skills).  I am going to make up for it with a marathon blogging session right up until the government is formed.

Last post, I wrote about limits on party spending.  Let’s now consider party revenue.  Recall from my last post that the Canada Elections Act regulates three sources of political spending:  1) that of national parties, 2) that of electoral district associations and candidates, and 3) that of 3rd parties.  I am just going to consider the war-chests of the national parties here.

It’s pretty easy to go on Elections Canada’s website and find summaries of the parties’ financial statements.  For example, the Conservatives’ statement 2013-2014 is here.

Looking at these, we see that the parties have the following net assets available from 2014:

  1. Conservatives: $22,356,056
  2. Liberals: $9,083,726
  3. NDP: $10,151,613
  4. Bloc: $3,169,676
  5. Greens: $4,380,732

You’ll note the big advantage that the Conservatives enjoy(ed).  It’s not clear how parties’ fund-raising has gone in 2015.  Looking at past elections, it’s clear that the Conservatives don’t actually enjoy as big a gap as this in election spending: first, spending is capped (see last post); second, other parties (esp. the Liberals and NDP) are clearly able to raise cash during campaigns.

A key change in the Elections Act is the demise of public funding of parties (remember that).  Well, the Conservatives did not kill that revenue stream dead immediately on securing a majority.  Rather, reading through the CEA indicates that they instead slowly squeezed off public funding;  parties received their last tranche of that money in April 2015, four months before this election.

In addition to these (central party) funds, parties’ respective candidates raise and spend significant amounts.  (Not significant by US standards, of course: the typical candidate can spend about $150-200K depending on the size of the district’s electorate).  Right now, I can’t get at these; the Elections Canada site is misdirecting me (probably because candidates’ final accounts have to be submitted, reviewed, and posted in short order).

It’s useful to put these amounts into context:  In 2012, the two US presidential nominees spent almost a BILLION dollars each!  There remain loopholes in Canadian campaign finance laws, but I would argue that the federal situation is pretty good in normative terms: we’ve capped spending, eliminated corporate donations, and limited the size of individual donations.  I think reasonable people can disagree on the desirability of state financing:  on one hand, state financing levels the playing field between established and new parties; on the other hand, it makes political parties more reliant on the state and less reliant on civil society.  Certainly, the campaign finance situation is much worse provincially and abysmal at the municipal level:  Vision Vancouver spent 3.4 million last municipal election in Vancouver.  Wow! That’s for a civic election for 422,000 voters or $8/voter for one party – way, way more than we allow federally! (And, of course, there’s the running saga on Montreal’s politics & money nexus.)  If you’re concerned about the influence of money on politics in Canada, your marginal effort is best spent regulating municipal campaign spending IMO.







Show me the money! Part 1

What’s in the Canada Elections Act?

A couple of weeks ago I promised to do a blog post on campaign spending.  This was provoked by the Conservatives calling the election 11 weeks in advance of polling day, making this campaign the longest Canadian general election of the 20th century.  The thrust of the media commentary was that by engineering such a long campaign the Conservatives have given themselves a distinct spending advantage over their opponents.  I am going to consider these claims in detail over the next few weeks, setting out the rules that govern campaign spending in Canada, examining the magnitude of the Tories’ fund-raising advantage, and then summarising what a lot of political science research tells us about the impact of campaign spending.  I’ll start today by going over the rules that govern campaign spending in Canada.

In Canada, spending related to federal elections is governed by rules and regulations set out in the Canada Elections Act (S.C. 2000 c.9). A copy of the CEA can be found at Helpfully, previous versions of the CEA are archived at the same site, so that one can figure out when and how the CEA has been amended over time… and it’s been amended a lot since 2003, 33+ times.

The CEA governs all manner of election-related spending and fund-raising, including spending on party leadership competitions, candidate nominations, third-party advertising, and political donations. I won’t consider spending on party leadership competitions or candidate nominations in any depth. Instead, I’ll focus on the rules governing campaign spending, third-party advertising, and political donations.

The CEA adjusts election expense limits for registered parties and candidates and election advertising limits for third parties by an “inflation factor” that corrects for purchasing power.  The inflation factor is fraction defined by the division of the annual average CPI for calendar year prior to the election by a designated base year’s CPI (currently 1998) calculated on the basis of 1992’s CPI = 100. This year the inflation factor is 149.0/108.6 = 1.372 (

The CEA draws a distinction between spending by i) registered parties and ii) electoral district associations and candidates. Thus the CEA can be viewed as regulating a party’s national spending ad its local spending.

At the national level…
Section 430 of the current version of the CEA sets out the maximum election expenses of registered parties as the product of $0.735  x the inflation adjustment factor of 1.372  x the number of registered electors for electoral districts in which the registered party has endorsed a candidate.  This gives $1.008 per registered voter.  I have not been able to find the number of registered voters for this election, but there were 24,257,592 registered voters in 2011 and about 200,000 are added per annum so that puts this year’s electorate at approximately 25 million. The maximum spending limit for any party that runs candidates in all 338 ridings is therefore about $25,200,000.

Now one of the crucial changes that the Conservatives recently made to the CEA was the proviso that should the election period extend beyond 37 days, then the maximum spending limit for registered parties is increased by adding to it the product of one thirty-seventh of the maximum amount and the number of days in the election period minus 37. This means that the maximum spending limit for parties for this year’s 78 day campaign is $25,200,000 x 78/37 = $53,124,324.  (To be fair, a reading of the 2nd reading debates indicates that the opposition parties were not particularly concerned about this change.)

At the local level…
The computation of the maximum spending limits for candidates is somewhat more complex.  This is because the base amounts that a candidate is permitted to spend varies with the size and population density of the electoral district that the candidate is contesting.  Specifically, the amount that candidates are allowed to spend is the aggregate of (a) $2.1735 for each of the first 15,000 electors, (b) $1.092 for each of the next 10,000 electors, and (c) $0.546 for each of the remaining electors.  Given an average of approximately 75,000 electors per district, the base spending limit for each candidate is $70,822.50.

However, a further provision stipulates that “if the number of electors on the preliminary lists of electors for the electoral district is less than the average number of electors on all preliminary lists of electors in a general election, then,…the number of electors is deemed to be halfway between the number on the preliminary lists of electors for the electoral district and that average number.”

Further, should the number of electors per square kilometre be less than 10, then then the base amounts listed above are to be increased by the lesser of $0.31 per square kilometre and 25% of the amount calculated under subsection (3), i.e., the $70,822.50.

The upshot of these last two provisions is that candidates’ base spending limits are disproportionately higher in less populous and less dense (i.e. rural) ridings. You can see this by comparing the 2006 spending limits for Cardigan PEI (2013 population: 36,005) – $63,114.75 to that of Parkdale-High Park, ON (2013 population: 105,103) – $75,877.63.  So despite having a population (and presumably an electorate) about 3 times as large as Cardigan’s, the base spending limit for candidates in Parkdale-High Park is just 20% higher.  This formula reflects a presumption that i) campaigns incur high fixed costs, and ii) that campaigns in densely populated urban areas enjoy significant economies of scale.

As with the national spending limits, the base limits for candidates are multiplied by the inflation factor (1.372) and prorated for the length of the campaign. Taking the average figure of $70,822.50 this suggests that each candidate this election is allowed to spend up to $204,841.  Elections Canada will, I’m sure, post the precise limits for each electoral district shortly – but even my rough calculations suggest a big jump in the limit from 2006, when it averaged just $81,200 per candidate.

There are a number of knock-on effects of this high per candidate spending limit.  For example, candidates are allowed to spend up to 20% of the election expense limit on their nomination races.

Third-party spending…
Finally, the CEA limits what third-parties can spend on advertising in relation to a general election.  This limit is straightforward:  third-parties cannot spend more than $150,000 from the time the writ is dropped to polling day multiplied by the inflation factor and prorated by the length of the campaign beyond 37 days.  So for 2015, the 3rd-party spending limit is $150,000 x 1.372 x (78/37) = $433,848.

But there are restrictions in how this money can be spent.  Provisions prohibit a group from splitting itself in two to avoid the spending limit, for example.  Further, not more than $3,000 (of the $150,000 base amount) can be spent to promote or oppose the election of one or more candidates in a given electoral district.

So what’s the bottom line here?  Well, nominal spending limits are a lot higher for the 2015 election than they were for the 2011 election.  About 2.5% of the increase is due to the natural growth of the electorate.  A further 17.5% of the increase is due to an increase in the inflation factor from 1.165 in 2011 to 1.372 this year.  Finally, the  extended length of the campaign is responsible for doubling of the limits (i.e. 78/37 = 2.11). Of course, on a per day basis the limits remain just 20% higher than in 2011.  This raises the question of whether it’s i) the sheer amount that parties and candidates spend that matters or rather ii) the rate at which  and the amount of time over which parties can spend that matters.