Pushing back against the claim that money doesn’t matter in politics

Eduardo Porter in the New York Times talks with some experts who have written things such as that “most companies do not get any return from their lobbying expenditures” and that “campaign finance had a tiny effect.”

Porter’s article is good: although he quotes some research that claims campaign spending has little effect, he also situates this in the larger picture:

Legislators also grant access to like-minded interest groups with little money to give. . . . The flow of money into politics is rising . . . These new resources could transform elections into something akin to ballot initiatives, where money has a proven track record in molding the outcome.

So I am happy with Porter’s article (for which I supplied some background).

Here I’d like to expand briefly by listing some ways in which money (campaign spending, also other expenditures such as issue advertising, the purchase of news outlets and the hiring of experts, etc) can have an effect on politics:

  • Affecting who wins a general election;

  • Affecting who wins the nomination, and which candidates are taken seriously (for example, parties are always on the lookout for self-funded candidates, rich people who happen to share the political views of party activists and would like to run for office);

  • Affecting particular bills (estate tax, health care, etc);

  • Affecting officeholders’ priorities (congressmembers are always talking about how much time they feel they need to spend on the phone, begging for money).

And this comes up in actual elections. See, for example, this NYT story from a few days ago:

The results reflect the degree to which she has dominated the airwaves and political conversation after spending more than $65 million, almost all of it her own money, beginning with her 2010 race. . . . Mr. Murphy, whose campaign has spent about $3 million so far . . .

Yes, money makes a difference. Of course. I just wanted to push back against too-clever-by-half attempts to dismiss the importance of money in politics. It’s certainly not the only factor but it’s there.

To put a quantitative spin on it, in reporting on the work of Steve Ansolabehere, Porter writes, “a candidate would have to double campaign spending to increase his share of the vote by four percentage points.” Sometimes one candidate does spend more than twice the other, and sometimes four percentage points makes a difference. Also the defensive aspect (taking so much time to raise money and adapting your political positions to work for this goal, so as not to be outspent) and what it takes to be taken seriously as a candidate in the first place.

5 Responses to Pushing back against the claim that money doesn’t matter in politics

  1. Adam September 6, 2012 at 11:37 am #

    If a candidates raises very little money, he is almost certain to lose. But there is always the question of endogeneity. Do the candidate lose because he had no money or were potential donors shy to give because he was certain to lose or is it both?

    Conversely, there is the candidate with who has a lot of money. If the candidate raises that money, it probably signals support and the viability of the candidacy. However, I’ve seen that a lot of self-funders, most spectacularly Meg Whitman , can spend a lot of money but it doesn’t equal support.

    • Andrew Gelman September 6, 2012 at 11:42 am #


      Money doesn’t always do the trick. But consider this: self-funding was one reason Meg Whitman got as far as she did.

  2. Adam September 6, 2012 at 12:13 pm #

    I agree. I think money is necessary but not sufficient to being successful in American politics. I just am skeptical of self-funding candidates. Many times they are losers when faced with a credible alternative.

  3. SD September 6, 2012 at 2:26 pm #

    I get the impression that economists are overrepresented when it comes to arguments that reduce to “money doesn’t matter” or “money doesn’t matter as much as you think”. I wonder why that is…

    Anyway, thank you for this blog post, but I am a bit confused about your endorsement of the article you linked to, outside of a cordial politesse. The author of the article actually seems to downplay money quite a bit, eager to reference research supporting that conclusion.

    • Andrew Gelman September 6, 2012 at 2:55 pm #


      The first two-thirds or so of the article downplays the importance of money in politics, but the conclusion is that money can make a big difference. I didn’t agree with everything in the article but I agreed with where it was headed.