How Much Does Money Matter in Politics? An Analysis Based on the Electoral Spending Reform in Chile (2013-2017)

Abstract

In recent years, different cases of corruption and irregular financing of politics in Chile have led to a change in the rules for financing electoral campaigns. New legislation lowered the limit on campaign spending in popular election and generating multiple effects on the electoral landscape, incentives for voters, candidates, as well as on the strategic coordination of each political parties. The article uses this change in public policy to estimate the effect of spending on the electoral performance of the candidates for Deputies in Chile. An original database was prepared, with information on all the candidates for deputies for the 2013 and 2017 electoral campaigns and at the commune level (n = 13,378). Then, a quantitative design with instrumental variables was applied. The results indicate that a decrease in the electoral spending limit affects the electoral performance of the candidates, reducing the percentage of votes obtained.