How Much Does Campaign Spending Influence an Election?
The 2020 Presidential Campaign is projected to be the highest-spending campaign in American history. Projected to cost over $5 billion, this coming election is looking to surpass the previous most expensive election in 2008 by $2 billion. With this huge influx in money and current data showing election campaigns progressively becoming more expensive, it raises an important question: what effect does money have on a candidate’s election prospects?
At first glance, there is a substantial claim that money directly affects an election’s outcomes. From 2000 to 2016, more than 90% of the highest-spending candidates in their respective districts were elected to the House of Representatives with only the 2010 elections dropping the rate down to 86%¹. Senate elections of the same time period also demonstrate similar, albeit with a slightly lower win rate of around 80%. Outside of just congressional races, money also acts as a predictor of the Presidential Elections. Out of the last eight election cycles, only the most recent 2016 election was won by the lesser spender, meaning that Donald Trump was the first presidential campaign to spend less money and still win, since Jimmy Carter last beat Gerald Ford in the 1976 election.
Further examination of academic literature further adds evidence that supports the initial claim. Multiple papers show a direct correlation between election spending and candidate recognition, especially for non-incumbent candidates. This means that those campaigns with the largest expenditures tended to be more likely to be remembered by their electorate³. Alongside recognition, there are also substantial claims that larger campaign financing leads to a larger percentage of votes won in the election. One paper found that a congressional candidate could increase their margin of victory from 3% to 60% by simply spending an extra $180,000⁴.
However, as indicting as these claims may seem, they may be a classic case of mistaking correlation for causation as there are various external factors that determine the amount of funding a candidate receives. For example, the specific political affiliation of a region is a crucial factor when determining how much financial support a candidate may receive. If a Democratic representative was running for office in a traditionally red district, it is likely they will not win. Investing in these candidates would be extremely risky, leading to less campaign funds raised when compared to that district’s Republican candidates. Additionally, not all candidates are created equal. Differing qualities of candidates inevitably leads to differing amounts of funding. Someone with decades of congressional experience is inevitably going to garner much more financial support than a first-time candidate hoping to win their first election. When controlling for these variables, one paper found a negligible effect of marginal campaign spending on capturing votes. This meant that up to a certain point as a candidate increases their campaign spending, there is almost no direct effect on the outcome of the election that cannot be explained by other factors.
The argument is not that elections do not require substantial funding. Instead, the real point being raised is that someone participating in an election has an equal chance of being elected without having to spend more money. To a certain extent, there is little marginal benefit an extra dollar brings to a candidate’s election prospects. For example, billionaire Mike Bloomberg entered the race to be the Democratic Nominee for the President of the United States of America with one strategy in mind “if you can’t beat them, buy them”. His campaign broke the record for the most expensive self-funded presidential campaign till-date, still having spent more than Donald Trump and Joe Biden combined. However, the billions of dollars he spent eventually got him nowhere. He dropped out after 100 days due to poor showings in the primaries where he managed to capture only 49 of the available 3,979 delegates, showing that money is not the only factor when determining a campaign’s success.
The 2020 Presidential Election will certainly be historic, not only because of the manner in which it is being conducted during the coronavirus pandemic but also because of its implications on campaign financing. Donald Trump is presently behind in funding, having raised $476 million against Joe Biden’s $540 million⁵, even though the former has had a head start as an incumbent. Would this difference make or break the election, or would it not matter given the argument that an incumbent’s marginal spending is not as worthwhile as the challenger? Does Michael Bloomberg’s failed campaign send a warning to other billionaires looking to self-fund a presidential victory? Given the track record of the larger spenders generally winning the Presidential election, will this follow the pattern or set a new precedent in line with the last election cycle’s result? Time will only tell, but for now, we can only just speculate until the ballots are counted in November.
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