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Politics and Money

When we talk about money and politics, we are usually complaining about it. We see that those who finance a campaign seem to get preferential treatment, even though this would be illegal if done explicitly. Yes, some politicians are in the pocket of large donors. But what about buying the election to begin with? Can a candidate really assure he or she is elected by spending enough?

In looking at the statistics to see if money effects the outcome of elections as much as people think it does, the problem is separating out the other factors. For example, the candidate with more money to spend may already be more popular, and get elected because of it. In fact, the high correlation between who the voters like and who spends more money may simply be a matter of the one people like more being able to raise more money due to that popularity. In other words, maybe the money doesn't get the votes as much as the popularity gets the money (and the votes).

Since voter appeal is hard to measure, Steven D. Levitt and Stephen J. Dubner, in researching their book Freakonomics, looked at political contests where two candidates ran against each other in two consecutive elections. Unless they change dramatically, they have the same general voter appeal, so it means more when their spending on one campaign is compared to the next, and to each other. In looking at many of these races (the same two candidates facing off more than once is relatively common), they found that money didn't matter nearly as much as thought.

In fact, they found that if a winning candidate cut his spending in half on the next election, he lost just about 1% of the vote. Conversely, a losing candidate could double his spending and gain only about 1% of the vote on average. Most elections are not swayed by a percent, especially if the losing candidate from the first try was down 20 points to start.

Essentially it was discovered that who you are, or rather how the voters perceive you, is more important than the amount of money you spend, and that money isn't as able to change that perception as we might think. The intersection of politics and money may not be as bad as we fear.