Saturday, March 19, 2011

Money and elections

It is common knowledge that money wins elections. If we look at tables containing the candidates and the money they spent, there is a clear correlation between money spent and who wins. This is the whole basis for most of the uproar about sponsorship scandals. But remember : correlation is not causation. Although more money might cause higher chances of victory, it could be that higher chances of victory causes more money. Or it could be that a candidate's appeal to the voting public causes both money and high victory percentages.
Let's first use an analogy to simplify the issue. When do you cheer for a sports team:
A) When they have a sure win
B) When they stand a possibility of loosing
C) When they stand a possibility of winning
D) When they have a sure loss
Most people would answer A, B, and C. If you answered A, it is probably because you wanted to cheer for your favourite team, which is currently dominating. If you answered B, it is probably to encourage your team to play a bit harder to minimise the chances of a loss. If you answered C, it was probably to get the final push going and claim victory. But if you answered D, it is because the team is your favourite, and it is unlikely that you would ever not cheer for it. Now just replace "team" with "politician and party", and "cheer" with money.
But if you don't like the logic type of argument, because the situation is actually more complex, then entreat the statistical argument. In the book Freakonomics, authors Steven D. Levitt and Stephen J. Dubner provide statistical proof that the candidates spending hardly matters at all when it comes to elections. They do this by comparing elections where the same candidates ran against each other (because the candidate is relatively constant). They found that when a candidate slashed their spending in half, they lost only 1% of their vote. (They used the 1000+ Congressional races where two candidates ran together for several times in a row, from 1970 until 2005, when the book was published. You can read the entirety of this argument on pages 8 to 11.)
But if you present the anecdotal evidence of various politicians who were elected "by money", as it would seem, allow me to present counter-evidence. Steve Forbes and Michael Huffington did not win their elections, and neither did Thomas Golisano, who spent $93 million of his own money over three elections, and won 4%, 8%, and 14%.
In conclusion, money does not win elections, and neither do elections win money. The chances of success of a candidate, based on their personality, their appearance, their charisma, and their platform win elections. Money is simply a byproduct of the of the chances, and has very little effect, the same way cheering has very little effect on the game at hand.


  1. Interesting, but hardly definitive evidence: no one really seriously maintains that it's a linear rel'n, or that a huge ad budget is SUFFICIENT to win. But there may still be an important threshold of political advertising spending which is crucial to winning national or state-wide campaigns, and maybe in the races that Freakonomics looked at, they were already exceeding that by many times, so they could easily cut it in half the next time w/o losing many votes. Your conclusion's a sequitur.

  2. Although there is probably a point where advertising has a large effect (larger that the 1% for doubling), this point is reached early. As soon as the party in question is known by the population, advertising does very little swaying. But these elections were actually pretty average in terms of their spending, very few of them being remarkable. We can therefore get a good estimate that the ad dollars, at the levels they are now, are having very little effect in terms of dramatic increases or decreases.

  3. Liberal fund raising?


  4. Has anyone considered causality the other way round? That the winning candidate attracts the most contributions?

  5. @The Rational Number I do believe that I mentioned that at the beginning of the post as one of the possible links of causation. Although I have found that it is more a third factor, a candidate's appeal, that that garners more support dollars as well as victory.

  6. Actually, the winning party is the one that has Godzilla. He could just eat the opposing parties.

  7. All I know for sure is that ignorance is a terrible abdication of responsibility and accountability:

    And just in case you think that I am just full of hot air, I PROVIDE THE PROOF HERE.

    I would love to hear from you.

  8. @ boyari2 Although the site you linked to proves your first statement, I didn't see the direct link with it and my article. I poked around in the archives for a bit, but did not see a post about campaign spending. If there is a specific post you were thinking of, could you please link to that one? Thanks.


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