Chapter III: Donation Dynamics: Do Critical Campaign Events Influence
3.2 Literature
Instrumental and Expressive Giving
Money is extremely important in presidential races, or any other election in the United States—one legislator called it “the mother’s milk of politics,”1and election campaigns stop when they run out of funds. Thus political giving is another form of democratic political participation, just as is voting, volunteering in campaigns, contacting public officials, political discussions, grassroots local activities, and so on (Rosenstone and Hansen, 1993; Verba et al., 1995). Therefore, campaign contribution literature has relied on similar theoretical frameworks used to model and analyze turnout.
Naturally, contributing has been subject to the same scrutiny posed in the voting literature—that is, of the “failure of rational choice theory” or the “puzzle of par- ticipation” (Verba et al.,1995). Just as one voter’s vote is not likely to be pivotal, a
1https://www.nytimes.com/1987/08/06/obituaries/jesse-unruh-a-california-political-power- dies.html
single campaign contributor’s money to a candidate, given the existing legal caps,2 are not likely to be enough to influence the outcome of the election. This is true of all federal races, including both Congressional and presidential races, and obviously more pronounced in the latter. Yet 23.4%3of respondents to the Cooperative Con- gressional Election Study claimed to have contributed in the 2016 election, among 80.2% of which have given to a presidential candidate. And among these American presidential givers, about 55.9% of them have givenonlyto the presidential race. If one’s money cannot influence the election outcome, why would anyone give?
Ever sinceRiker and Ordeshook(1968) attempted to rescue the instrumental calcu- lus of voting in Downs (1957), voting has been regarded as a decision based on both instrumental and expressive components (Fiorina, 1976). By instrumental motiva- tion, I refer to the Downsian utility in which a donor’s money has value only when her dollar is pivotal in helping the more ideologically proximate candidate win. By expressive motivation, I refer to the utility that results from the act of contributing itself, such as psychological satisfactions in fulfilling the civic duty or expressing solidarity with the supporting candidate or cause. Which of these two prevail in individual campaign contributors?
One literature4 has argued more for the instrumental and strategic motivations of campaign contributions, such as (Bartels, 1988), Mutz (1995), Ovtchinnikov and Pantaleoni (2012), andHill and Huber(2017). This is especially because contrib- utors are thought to be more politically involved, knowledgeable, and sophisticated (Mutz, 1995). Others have argued that political giving is expressive, especially
2Currently, an individual’s contribution to a federal candidate is capped at $2,700 USD per election, counting the primary and the general elections separately.
3CCES 2016 cross tabulations without adjusting with survey weights. While the proportion of presidential givers among all campaign contributors are stably around four-fifth, the proportion of campaign contributors in presidential election years have been declining from 2008 (36.5%) and 2012 (31.5%).
4I do not mention some other prominent campaign finance literature, because they are not relevant. Within the thin individual contributor literature,5most of the past literature has focused on Congressional contributors. This is simply because their data is more useful in comparing donor types, with all the variability in candidates and states that can be exploited. Unfortunately, presidential donors and Congressional donors often do not overlap: for instance,Francia et al.(2003) have classified Congressional contributors into three types: investors, ideologues, and intimates, who are respectively donors who give expecting some quid pro quo benefit from the legislator, donors who give because of ideological similarity, and donors who give simply out the pleasure of associating with the high social circle created by the legislator. However, this frame is not informative when observing presidential contributors, who overlap little with presidential donors. For instance, in the CCES 2016, while 75% of Congressional donors are also presidential donors, only 26.4% of presidential donors are also Congressional donors. In addition, it is much more difficult to imagine that many investor-type or intimate-type contributors to the presidential candidates.
considering the limits of one individual’s money being able to sway the election.
Ansolabehere et al.(2003) describe political giving as akin to donating to the Red Cross.
The most prominent of the research explicitly dealing with presidential donor moti- vation,Brown et al.(1995), classify motivations into three: purposive, solidary, and material. The first is instrumental, and the latter two are expressive, as ‘material’
contributors in their book indicate those who answered that they give because it is something “expected of someone in my position,” if I set aside donors with “busi- ness and employment reasons.”6 That is, they recognize that there are both types of donors. Or both motivations behind an individual, with perhaps different weights given between them.
Suppose a donor is strategic and cares about the outcome of the election. How would her contributing behavior change? First, if she is sufficiently forward looking, she is better off giving early in the campaign. Within the election cycle, if she receives new, important information on candidates, she will rationally update her priors on the viability of the candidate, which will increase or decrease the utility from giving.
Suppose there is a positive shock to a candidate that is observable to most donors.
Then on the aggregate level, it is likely that I will see a financial “bump”, a reflection of donors revising their decision to invest in the candidate in question.
Now suppose that a donor is expressive. The Riker and Ordeshook approach, which sets the expressive utility as a constant, gives no information on when this person is likely to give. Given that there are dynamics in the campaign, it is difficult to imagine that the expressive utility from giving is constant. In Section3.2I present one branch of theory as to how expressive utility may look like.
Momentum in Elections
Another thread of the campaign finance literature deals with momentum (Mayer, 1996; Mutz, 1997; Steger et al., 2004; Norrander, 2006; Donovan and Hunsaker, 2009;Butler, 2009), which is something distinct from Bayesian updating and “in- vesting” to increase the return. Butler(2009) summarizes this as follows:
Victory creates enthusiasm among supporters, who increase their cam-
6Brown et al.(1995)’s donors were documented only after they have given $200 or more. This is equivalent to more than $400 in 2016 dollars. I expect that within the donors observable from FEC transactions, the proportion of donors with material motivations is much lower in recent elections than in past elections. For the discussion of hidden donors by reporting threshold, see Chapter 2.
paign contributions. ... The reverse effect happens for losing candidates.
Momentum in primary victories is an important factor well-recognized in political science, especially due to the sequential nature of the United States primaries (Knight and Schiff,2010;Redlawsk et al.,2011;Collingwood et al.,2012). Candidates spend a disproportionate amount of money and time in the first few primary sites such as Iowa, which is one of prominent reasons why candidates now shun public matching funds—federal funds require that candidates spend proportionately to the state’s population, a high disadvantage in the early primaries. It is also well-known that the media coverage is biased by the sequence in the primaries. Norrander(2015) states that Iowa and New Hampshireeach receive five to ten times more coverage than the average state’s presidential contest.
Why would there be any momentum, an overestimation or an underestimation of the underlying candidate viability? One reason could be that people like backing a winning horse, and they look to each other to catch signals on candidate viability—
donating to those with a positive signal will then result in a herding behavior.
Another idea is that there is a certain utility from “suspenses” or higher variance in beliefs, and surprises in themselves (Ely et al.,2015).
What is interesting is that whether a donor is instrumental or expressive-momentum driven, both of them will be responsive to the same critical events in the campaign.
These include initial primary victories or upset, surprise wins in which the candidate exceeds expectations. Assuming that information on candidate viability is not quite accurate, and donors are generally instrumental or momentum-driven, I can then hypothesize that I will see sharp boosts, apart from a smooth, slow trend, at these particular event dates. In this paper I do not aim to disentangle the two but to test it jointly.
3.3 Data and Methodology