The financial incumbency advantage: Causes and consequences

 
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Political officeholders have long been seen as having a wide range of advantages over challengers: Name recognition is no problem, as they’re always in the public eye. Even if voters don’t agree with every position a long-time incumbent might take, they like the prestige and power that can come with seniority. And most importantly, officeholders make policy, so donors know to whom they should be signing the checks.

As noted by columnist David Brooks in the New York Times, in 1972 incumbents had an average spending advantage of 3 to 2 over challengers, and it’s since risen to 4 to 1. But having “ready money” isn’t always a guarantee of success, as House Majority Leader Eric Cantor found out to his chagrin in June 2014: He had a 27-to-1 spending advantage over his primary opponent, economics professor David Brat, yet was still soundly defeated.

To better understand the range of factors in play, a 2014 study from the London School of Economics and Harvard University, “The Financial Incumbency Advantage: Causes and Consequences,” examines how incumbency — rather than the quality of a politician’s performance — influences campaign contributions. Empirically, this effect can be difficult to test; how do you know what funding was given because the candidate has proven to be effective at her job and what funding was linked to the fact that she is the incumbent?

To try and tease out the causality, authors Alexander Fouirnaies and Andrew B. Hall use a statistical method called regression discontinuity design (RDD). In essence, they seek to isolate the incumbency effect by comparing groups of candidates that barely won elections to those that barely lost. “If the campaign contributions donated to the party in the next election cycle in districts it barely won differ systematically from the donations the party receives in districts it barely lost, this difference can be attributed to the impact of incumbency under weak conditions,” the authors state.

The dataset used includes U.S. House of Representatives elections from 1980 to 2006 and state legislative elections from 1990 to 2010, as well as data on campaign spending at the federal level from the United States’ Federal Election Commission. Figures are expressed in constant 1990 dollars.

Key findings of the study include:

  • Compared to challengers, incumbents on average have a $275,000 advantage in contributions in U.S. House elections and receive $28,000 more for state-legislature races.
  • Overall, Democratic incumbents have a 20- to 25-percentage-point advantage over challengers in the party’s contributions at the federal and state levels.
  • Interest groups motivated primarily by the desire for political connections tend to invest more in incumbents’ campaigns compared to groups that donate for more ideological reasons.
  • In U.S. House races, ideologically motivated groups contribute 16.57 percentage points more of all their donations to the incumbent party, while access-oriented groups favored incumbents by 40.52 percentage points.
  • As a consequence, access-oriented interest groups are thus responsible for approximately 60% of the financial advantage of House incumbents. In state legislatures, such groups weigh even more heavily, providing 71% of the financial advantage of incumbents.

The authors note that “the electoral incumbency advantage may provide elected officials with poor incentives if it insulates them from reelection concerns and thus leads them to exert less effort on behalf of their constituents.”

Related reading: A 2011 Congressional Research Service report, “State of Campaign Finance Policy: Recent Developments and Issues for Congress,” looks at the evolving campaign-finance landscape in the wake of the Supreme Court’s Citizens United decision. Also of interest is a research brief from the University of Houston, “Do Term Limits Encourage Legislators to Ignore Constituents?”

Keywords: campaign fundraising, campaign ads

Last updated: June 18, 2014

 

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Citation: Fouirnaies, Alexander; Hall, Andrew B. “The Financial Incumbency Advantage: Causes and Consquences” Journal of Politics, 2014. doi: 10.1017/S0022381614000139.