Ceilings on campaign spending: Hypothesis and partial test with Canadian data

Abstract

In the past decade federal and provincial legislatures have imposed ceilings on what candidates may spend in their formal campaigns for elections. A pamphlet issued in 1974 by Elections Canada explained that limits to expenditure ' . . . ensure that any Canadian can consider becoming a candidate without fear of being overwhelmed by a more wealthy o p p o n e n t . . . '. However, wealth to those in pursuit of office can have wider meaning than the control of a private fortune. Incumbent candidates can be 'wealthy' if their visible proximity to power gives them greater success than to their challengers in soliciting campaign funds from special and public interests. Hence this legislative movement presumably sought not so much to restrain financial magnates as to even the chances of all contestants in the political race. The legislation of ceilings seems a reasonable democratic exercise. Yet it is curious that such a law should have found the support of so many holders of elected office. It is, after all, incumbents who apparently stand to benefit least from a cap on their spending. Nevertheless, it is from incumbents at federal and provincial levels, and without obvious pressure from the public, that the impetus for these laws has come. Could it be that incumbent politicians derive an advantage from ceilings? Jacobson (1978) reflected briefly on this. He found in his empirical work that the expenditures of congressional incumbents were less productive than those of their challengers. From this he (1978: 489) concluded that 'Ceilings on permissible expenditures, if they have any effect on it at all, can only lessen competition'. Here then is a possible answer. Incumbents may feel threatened by the greater effectiveness of funds spent by their challengers. A ceiling would