Money Walks

Why campaign contributions aren't as corrupting as you think

Jeff Milyo from the July 1997 issue

(Page 2 of 2)

In 1992, Waldholtz received only 36 percent of the vote. In 1994 she won with 56 percent. If we attribute all of the 20-percentage-point increase in Waldholtz's vote to this ill-gotten windfall, then it seems that an extra $100,000 in spending yields 1 percent of the vote. However, other factors also contributed to the Waldholtz victory. First, Shepard's surprisingly liberal voting record alienated many voters (she even needed a police escort at one district meeting). Second, 1994 was a good year for Republicans in general: The average electoral swing to Republicans challenging Democratic freshman was six percentage points.

This leaves an unexplained increase in Waldholtz's vote percentage of at most 14 points. In the 1992 race, a conservative third party candidate, Merrill Cook, polled 18 percent of the vote, but no major independent candidates ran in 1994 (Cook won the seat in 1996, running as a Republican). If only half of Cook's voters in 1992 went for Waldholtz in 1994 (a very conservative estimate), then the unexplained swing to Waldholtz shrinks to just five percentage points. If all of this swing in vote share is attributed to the illegal influx of campaign spending, then it seems that an extra $100,000 of campaign spending buys at most 0.25 percent of the vote.

That case study is provocative, and also in line with other research. StevenLevitt, an economist at Harvard University, has examined all repeat meetings of House candidates (such as Waldholtz-Shepard) from 1978 to 1990. Levitt has found that an extra $100,000 in candidate spending (whether spent by an incumbent or challenger) leads to an increase in the candidate's vote share of about 0.2 percentage points. I have replicated Levitt's analysis using more recent data and have found similar results.

These recent studies cast serious doubt on the notion that elections can be bought. If we take Levitt's estimate of 0.2 percentage points per $100,000, then to buy just 10 percent of the vote in a typical House district, you would need to spend $5 million. Newt Gingrich spent a little more than that in 1996 and won by 15 percentage points (but his opponent spent over $3 million). Only four other House candidates spent as much as $2 million in 1996, while the average House incumbent spent only about $650,000. This suggests that only very close elections can be bought. But few elections are that close. For example, if every challenger had been given an extra $100,000 to spend in 1996, then Levitt's model predicts that two additional House incumbents would have been defeated. Extending this to the previous five House elections, only nine more races would have turned out differently.

In a 1996 study, Ohio State University political scientist Tim Groseclose and I found still more evidence that campaign spending is not all that the conventional wisdom supposes. Like many other researchers before us, we discovered that stockpiles of unspent contributions, or incumbent war chests, had no deterrent effect on challengers in House races. What was novel about our study was that we also considered the possible deterrent effect of an incumbent's personal wealth. Many reformers have called for a ban on both war chests and self-financing, since neither of these funding sources is limited by current law.

The conventional wisdom holds that potential challengers shy away from taking on well-heeled incumbents, which confers an unfair advantage to the wealthy. But we found no evidence that an incumbent's personal wealth affects either the presence or quality of challengers. By itself, this lack of deterrence is puzzling. Yet these findings are quite consistent with the
studies of campaign spending already discussed. Challengers are not deterred by incumbent war chests or personal fortunes because money simply isn't that important in congressional races.

But if challengers aren't deterred by war chests and personal wealth, why are there so few good challengers in congressional races? The obvious answer is that even good challengers would lose. Even when congressional approval ratings were at an all-time low, most survey respondents indicated that they would vote to re-elect their own representatives and senators. It isn't hard to understand why most incumbents are so safe from competition.

Indeed, it's a little like the reason men do not ask Maria Shriver out on dates: It isn't because Arnold Schwarzenegger can outspend them; it's just that he was chosen through a competitive process and for now he's doing a satisfactory job. And though Arnold may have some incumbent advantage, the main reason for his success is that Maria really likes him. Similarly, congressional turnover rates are low because politicians are such able and attentive suitors to their constituents.

Even though campaign spending isn't the key to re-election, that doesn't mean candidates don't work very hard to raise funds. Just because campaign ads don't have much of an effect doesn't mean that anything else candidates do is more effective. But it is ridiculous for reformers to claim that dollars, not votes, elect legislators. I don't vote for a candidate just because he spends the most money, nor do you. It's insulting to think so little of our fellow citizens that we believe elective offices go to the highest bidder.

If campaign spending really doesn't alter the electoral prospects of a candidate, why do so many citizens, clubs, unions, and corporations make contributions? The quick answer: They don't. Only 5 percent of voters make political contributions of any kind. Further, the total amount spent on political campaigns per election cycle is less than consumers spend over a similar period on chewing gum, greeting cards, or yogurt. If legislation is for sale, it seems
unlikely that the power to coerce millions would be priced so low. Even the PACs are pikers; PAC contributions are typically in the range of $500 to $2,500, well below the legal maximum of $10,000 per candidate for each election cycle.

Further, PAC contributions accounted for only 34 percent of total congressional campaign receipts in 1988 and 1990; the share fell to less than 30 percent for 1992 through 1996. Perhaps the decline is linked to the realization that, despite several studies, there is no systematic evidence that legislators cast their votes in response to campaign contributions. PAC contributions mostly function not as bribes but as donations to like-minded legislators. If PAC contributions were meant as bribes, they wouldn't be very effective ones. Given the limited effectiveness of campaign spending, a $500 PAC contribution probably won't elicit much gratitude from a member of Congress.

Contrary to the conventional wisdom, congressional campaign finance is not out of control. Money is nowhere near the dominant force that reformers claim. Once we realize this, proposals to limit freedom of speech in the name of cleaning up elections, such as the McCain-Feingold bill, become less appealing. Private campaign finance does not have nearly as severe a corrupting effect on elections as many claim. Though the reformer lobby should greet this revelation as good news, somehow I doubt it will.

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