Can money buy elections? Evidence from the Canadian Context

Does the amount of money a candidate spends on their campaign have an impact on their success in their local race? There are many studies, from both the Canadian and international context, that consider the relationship between money and electoral success at the district level. They all begin with a similar hypothesis: the more money a candidate spends, the more people they can reach with advertising and canvassing, and the more publicity, the more votes they are likely to get. But all these studies also outline a key challenge: the ability to raise money and the ability to win elections are likely caused by the same factors. Two of these major factors are candidate quality and the probability the candidate is going to win. The same factors that make a candidate appeal to voters – be that their experience, qualifications, or charisma – will make the candidate appeal to donors (since donors are voters and vice versa). Additionally, individuals donate to candidates who have some chance of success. In other words, why invest money in a campaign that is unlikely to win? This problem of endogeneity is the central challenge studied by scholars seeking to uncover the relationship between money and electoral success, beginning as early as the 1980s to the present day. This paper considers the relationship between spending and electoral success in electoral districts during the 2019 Canadian federal election. After exploring the main solutions proposed to the problem of endogeneity between spending and electoral outcomes, it presents three possible methods to model this relationship, using data from candidate expense data, candidate characteristics, district-level census data, and electoral outcomes. It finds that for all modelling strategies, spending by a local candidate is significantly related to their vote share, demonstrating that money really does matter for electoral outcomes in Canada.