Does Campaign Spending Affect Electoral Outcomes?

Abstract

This study investigates the effect of candidates’ expenditure on elections’ results focusing on run-off elections’ data. Our analysis, based on all the available run-off municipal elections in Israel between 1993 and 2008, shows that candidates’ share of the vote is not substantially affected by their campaign spending. The effect is not substantial even though campaign expenditures in local elections is considerable, averaging $11 per constituent. This outcome contradicts recent results in the related literature showing that, in a developing country where voting is compulsory, campaign expenditures have a significant effect on vote shares. Yet, it is in line with the evidence of earlier studies based on developed countries showing that the effect of campaign spending is limited. This leads us to suggest that campaign spending is effective in developing countries because compulsory voting forces the relative poor population to turn out and vote, and this population is relatively more impressionable by campaign spending on media advertisements.