Electoral contests, incumbency advantages, and campaign finance

Most campaigns do not revolve around policy commitments; instead, we think of campaigns as contests in which candidates spend time, energy, and money to win. This paper develops models of electoral competition in which candidates select levels of effort. The analysis offers insights about which causes of the incumbency advantage ore consistent with the empirical record. Marginal asymmetries in costs or technology can explain the advantage; asymmetries in voter preferences cannot. The analysis also speaks to the consequences of campaign finance reform. Reforms can be interpreted as shocks to the cost of influencing voters' perceptions; limits generally increase the likelihood that advantaged incumbents win, and even limits that target incumbents do not improve the welfare of disadvantaged challengers. Alternatively, caps on the amount of effort can either increase or decrease the probability that the disadvantaged candidate wins. Ironically, with very tight caps, the advantaged candidate wins for sure.