Abstract
The occurrence of early elections varies significantly between and within electoral democracies. Previous studies have investigated the determinants and the electoral consequences of early elections. However, whether early elections affect financial contributions to political parties has not been independently studied. This article argues that incumbent government parties gain a relative advantage compared to non-government parties with regard to private contributions in years of early elections. This argument is tested using party-level data from Denmark. Taking party-fixed effects into account, the results show a strong incumbency advantage in private contributions for early elections. The findings suggest that the ability to call early elections gives incumbent parties an additional advantage besides being able to call elections when economic conditions and opinion polls are favorable.
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Notes
Normally thought to be the big two/three: inflation/growth and unemployment of the economic voting literature (Lewis-Beck and Paldam 2000, p. 114).
See also Cahill and Tomashevskiy (2019) for a recent paper on the effect of political contributions on political parties’ policy positions.
As in most theoretical models of political contributions (Grossman and Helpman 2001, pp. 225–226).
This is also the case in Denmark, where political parties, in the years 1991–2013, received on average over twice the amount of private contributions in election years compared to non-election years.
In the article mainly referred to as “non-scheduled” or “early” elections.
In most OECD countries early elections can be called, although the government’s power to call them at its own discretion varies (Goplerud and Schleiter 2016).
Of course, early elections are sometimes called due to a unanticipated government crisis or political scandal in which case the incumbency advantage should not necessarily exist.
For an example, they can contact previous donors to the party.
As an example, in Denmark in 2009, a political funding organization associated with the Danish Bankers’ Association donated money both to the Danish major center-right parties as well as the Danish Social Democrats.
However, certain features of private funding in Denmark are different from some other European and Western democracies such as the strong ideological bias of most large political donors.
According to the wording of the Danish constitution the power is officially with the monarch but de facto and according to constitutional norms the power is with the prime minister.
New Danish parties enter the sample as data for them becomes available. Parties not represented in the parliament are not part of the sample. The centrist party Center Democrats, which was represented in the Danish parliament until 2001, is not part of the sample.
Data from 2012 and onwards are available on the Danish Parliament's website. I am grateful to Karina Korsiara-Pedersen for providing the data from the 1991–2012 period.
Although, the specific contribution from each private donor is usually not disclosed.
Some Danish leftwing parties issue a "party tax" on their parliamentarians, but the level and scope of this technically private contribution are within the control of the party itself, so it is counted as a private contribution for the sake of this article.
Formal support parties for the current government, such as the Danish Peoples Parties during the tenure of the 2001–2011 center-right coalition, are not coded as government parties, since the theoretical argument rests on the assumption that the information asymmetry arises from being formally part of the government and thus able to directly influence strategic election calling without necessarily invoking a vote of no-confidence.
The core results are also robust to coding a scheduled elections as an election held within 6 months of the end of the official electoral term. Results are available upon request.
Results are similar if a time-trend is used instead of year-fixed effects. These results are available upon request.
However, the core results do not change with the removal of party-fixed and year-fixed effects. These results are available upon request.
However, the results are not substantively different with the exclusion of the lagged dependent variable. Results are available upon request.
Which a Wooldridge test suggest is an issue.
It might also be plausible that private contributions to political parties, including government parties, would be greater in economic boom years, if private contributions to political parties can be seen as a consumption good. The question of political contribution as political investment or consumption is a considerable topic in the study of political contributions, especially in the US (Gordon et al. 2007).
The early UK election in June 2017 suggests that the British reform might not have de facto disincentivized the use of early elections.
As well as perhaps whether the total amount of private contributions are capped or not.
Especially, as these factors also seem related to the prevalence of early elections (Riera 2015).
The mechanism for an incumbency advantage in private contributions might also change if the motivation of the donor is to buy access to policymakers. If early elections signal a higher chance of winning for the incumbent, see Schleiter and Tavits (2016), this might make access-oriented donors more likely to donate to the incumbent. I owe this alternative mechanisms to a previous commenter.
I am thankful to one of the reviewers for pointing this alternative relationship out.
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Acknowledgements
I would like to thank Martin Vinæs Larsen, Conor Little and seminar participants at the University of Copenhagen and the Danish Political Science Association’s Annual Meeting for useful inputs. Special thanks go to Karina Korsiara-Pedersen for generously sharing her data.
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Appendix: Analysis with scheduled election coded by calendar year
Appendix: Analysis with scheduled election coded by calendar year
See Tables 5, 6, 7 and Fig. 2.
The interactive effect between early election and government status. a Early election effect conditional on being government party. b Effect of government party conditional on early election. The marginal effects are based on the estimation in Appendix Table 5, column four. Vertical lines show 90 pct. confidence intervals
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Aaskoven, L. The electoral cycle in political contributions: the incumbency advantage of early elections. Acta Polit 55, 670–691 (2020). https://doi.org/10.1057/s41269-019-00138-3
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DOI: https://doi.org/10.1057/s41269-019-00138-3