How much money was spent by electoral candidates in 2008?

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In the ongoing back and forth that Stephen and Michael are having in the comments section in response to one of Stephen’s earlier posts, Michael comments that he would be more convinced that spending plays a limited role in elections if politicians “started acting as if money for campaigning didn’t matter”.

As a result I’ve been wondering how much electorate candidates spent in the 2008 election.  If candidates believed that spending would have a significant influence on the outcome of that election, they would presumably have spent as close to the $20,000 cap as possible.

I’ve compiled a table (which is included at the bottom of this post) of the spending by the two highest polling candidates in the closest electorate races in the 2008 election (using the figures from the Electoral Commission’s website).  I selected all those electorates which were decided by less than 2,000 votes (15 electorates) on the basis that if money matters, presumably it matters more in close races. The table shows the amount spent by each candidate and that figure as a percentage of the $20,000 spending cap.

Obviously, a range of factors impact on how much a candidate spends in an election (not least how much the candidate can raise).  The table also has obvious limitations, so I include it only because I think it is interesting to note that in a number of these races candidates could (assuming they could raise more money) have spent more. The average amount spent by the candidates in the table below was $14,660.07 (or 73.30% of the maximum). Did candidates refrain from spending more because they didn’t think it was worthwhile or did they face fiscal constraints?

Finally, when I was compiling the table I noticed that spending in the Maori electorate seats seemed generally quite low.  On average the Maori Party candidates spent $11,935.87 per seat and the Labour Party candidates $10,052.71 per seat (I haven’t had a chance to work out the average for the other seats yet). Interestingly, the Cabinet Paper records that the Maori Party were in favour of increasing spending limits for constituency candidates in electorates in excess of 20,000 square kms (see para 43).  The Cabinet Paper doesn’t say how much the Maori Party wanted to increase the limit by.  I wonder what the thinking behind the Maori Party submission was? Perhaps they are hoping to have more funds to spend at the next election?

 

Update: Jono has just informed me that Nikki Kaye actually raised over $20,000, but according to the table above went on to spend just under $12,000.  Pretty remarkable if advertising is an important influence on voter preference. Equally a bit of a problem for my view that advertising is the best of a bad bunch in terms of convincing voters. – Steve

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8 Responses to “How much money was spent by electoral candidates in 2008?”

  1. stephenwhittington Says:

    I’m amazed at the Auckland Central figure. It seems like it’s one of those seats that parties love to win, also seems like some costs would be higher (billboards), while some would be less (travel, although that does not seem to square with the Maori seats).

    I vaguely remember that National had money left over. Is that right? They could have donated to individual candidates if money was influential – or is that not legal?

  2. Jonathan Says:

    Further to Steve’s update: Nikki Kaye received $20,519.60 in donations and spent only $11,901.05. Interestingly, she spent only $1,519.89 on newspaper advertising, $83.50 on internet advertising, and $10,297.66 on “other forms of advertising/publicity”. I’m not sure what that entails, perhaps leaflet drops? Her opponent, Judith Tizard, spent her money in a similar way.

    There are a few candidates who raised more money than they spent. You can compare candidate expenditure and donations on the spreadsheet here: http://www.elections.org.nz/files/Candidate_returns_of_expenses_and_donations_-_Election_08_-_by_electorate.xls I can understand why some candidates in safe seats, like John Key, would direct the money into the national campaign but like Stephen I am surprised that this happened in Auckland Central.

    Steve: as I understand the donation regime in place in 2008 parties weren’t required to declare the total amount of donations they received. So I don’t think it is possible to know if overall National received more in donations than it spent.

  3. stephenwhittington Says:

    Ahh ok. What happens to left over money? Can they bank it for next time?

  4. Jonathan Says:

    As far as I know, yes. Parties are required to make annual donation returns which are available here: http://www.elections.org.nz/record/donations/. I don’t know of any requirement for parties to spend money within any particular time frame.

  5. Colin Hunter Says:

    He guys,

    I’m glad to read your blog, I hope it is well.

    I think though your attempt here to use this information to draw any kind of conclusion or even as evidence for anything is very flawed. While it is interesting to look at the figures individually there are many, many other factors, strategic decisions and other implications for spending in these areas. For example while spending may or may not be an important factor in outcome, it is impossible to tell what effect it has with out many other data points. Firstly year on year voting figures, secondly changes in annual spending for starters. Other important factors may be to look at part votes and changes in them year on year, as well as preferred prime minister stakes and various other brand implications and hence how a party uses funding for strategic purposes, not just electoral seats. Also more qualitative analysis about platforms, policy analysis and various other factors may have significant impacts in various electorate seats, it may be that a particular policy will turn popular support one way or another and hence the effect of differentiation in candidate spending may mask the actual effect (or perhaps show an effect that is not there) . Long term research year on year with significant sample size may be able to overcome such issues, but looking at low level electoral spending from a single year is so small as to be meaningless and any conclusions drawn would seem to be in accurate. Further more I think that given the very low level of funding and the therefore high relative variance of it, I suspect this further dilutes its use as reliable quantitative data.

    Anyway enjoying the blog keep it up. 🙂

  6. Jonathan Says:

    Colin, thanks for your comments.

    I agree with you that the information is too limited to draw any conclusions about the influence that money has in elections and that a number of other factors have implications for how much money is spent.

    To be clear, the only reason I think the figures are interesting is because they show that in 2008 in these races many candidates could legally have spent more. It would seem (I say seem given that overall party donation levels are not disclosed) that some candidates could have spent more money. If that assumption is true, those candidates did not regard additional spending as being worthwhile, for whatever reason.

    Thanks for reading and commenting. I hope you continue to enjoy the blog.

  7. Jesse Says:

    Hey Colin,

    I think Jono’s main point was about candidates’ behaviour.

    However, I agree that to try to model the relationship between candidate spending and election outcomes you need a big data set over a significant number of elections and a good way to control for some of the factors you discuss (incumbency, nationwide swings). There’s a few of these kinds of studies in the US (e.g., one of the authors of Freakonomics, Steve Levitt, published a good study on House elections between 1972 and 1990). The other problem, as you say, is that the effect of the low candidate limits would probably make it hard to get much out of the data in NZ. Australia would be a better place to study.

  8. Colin Hunter Says:

    I was less responding to Jono’s argument and more to steve’s comment afterwards, about the effectiveness of advertising, in hindsight, I admit that isn’t clear from what I said, sorry…

    I would stress though that while candidates are under the limit and this is quite interesting, they aren’t that significantly under, say orders of magnitude less and you might explain this in a number of ways. Firstly the data you are looking at is off the back of serious election overspending in the previous election, this was a major issue for many political parties and it would not surprise me if political parties where much more wary of such over spending this year, again year on year data would easily resolve this (so this may be incorrect). Secondly I’d guess running out of money is probably far worse than underspending. If you were to spend your entire budget early in the campaign, this could prove disastrous, not to mention having extra money for contingencies is likely very important. I think it is very interesting that Nikki Kaye didn’t spend all the money raised for example and while I can think of reasons this may be the case (perhaps polling showed she would win and so further expenditure was unnecessary), it does leave many unanswered questions.

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