The Incumbent Spending Puzzle*
Version of Record online: 22 MAR 2012
© 2012 by the Southwestern Social Science Association
Social Science Quarterly
Volume 93, Issue 4, pages 932–949, December 2012
How to Cite
Magee, C. S. P. (2012), The Incumbent Spending Puzzle*. Social Science Quarterly, 93: 932–949. doi: 10.1111/j.1540-6237.2012.00845.x
- Issue online: 5 NOV 2012
- Version of Record online: 22 MAR 2012
This article seeks to explain the puzzle of why incumbents spend so much on campaigns despite most research finding that their spending has almost no effect on voters.
The article uses ordinary least squares, instrumental variables, and fixed-effects regression to estimate the impact of incumbent spending on election outcomes. The estimation includes an interaction term between incumbent and challenger spending to allow the effect of incumbent spending to depend on the level of challenger spending.
The estimation provides strong evidence that spending by the incumbent has a larger positive impact on votes received the more money the challenger spends.
Campaign spending by incumbents is most valuable in the races where the incumbent faces a serious challenge. Raising large sums of money to be used in close races is thus a rational choice by incumbents.