Commentary

Destroying Political Competition

By Patrick Basham
This article was first published in the National Post, June 13, 2002.

The American experience with campaign finance regulation serves as a cautionary tale for Canadians who believe the “reform” legislation announced by Prime Minister Jean Chrétien will solve their political problems. No matter how severely donations are limited or how many are disclosed, the new legislation will make a bad situation worse.

Critically, Canada is following rather than rejecting the U.S. regulatory model. Both countries are making it harder for newcomers to run for office by strengthening the advantages incumbent politicians enjoy, thereby reducing political competition.

By dramatically limiting corporate and union contributions — largely positive influences that help boost voter turnout and increase the competitiveness of targeted seats — political leaders on both sides of the border self-servingly ignore their respective political system’s principal systemic weakness, i.e., incumbency protection.

Canada has already gone a long way down the wrong regulatory path. Miserly spending limits apply both to parties and to individual candidates. According to chief electoral officer Jean-Pierre Kingsley, such “limits on election expenses for parties and candidates are an essential element in our electoral system because they foster participation.”

But participation isn’t the same as competition. Indeed, an analysis of the 2000 election results finds that one-third fewer incumbents lost their seats than the number defeated in the previous election in 1997. Unsurprisingly, only one-third of defeated incumbents were members of Mr. Chrétien’s own Liberal caucus.

Other factors contributing to the high incumbent re-election rate include the usual suspects: tens of thousands of mailings to constituents; staffs both in Ottawa and in constituency offices; generous travel allowances; and, most recently, Web sites for campaigning — sorry, communicating — with the electorate.

In addition to being paid for by taxpayers, these vote-enhancing instruments share a common origin: All were self-bestowed benefits brought into effect by incumbent politicians seeking to reinforce their political invulnerability. New limits on corporate and union contributions to parties are similarly designed to ensure the same outcome: an unequal campaign playing field. In practice, contribution limits are simply price controls and, as such, they are both ineffective and costly.

U.S. political scientists find contribution and spending limits prevent challengers from buying publicity and thus overcoming the inherent advantages of incumbency, such as name recognition. Only by spending large sums on radio and TV advertising, direct-mail solicitations, and grassroots organization can a challenger develop the levels of name recognition, issue identification, and voter mobilization to catch up with the years of subsidized campaigning and pork barrel spending that so characterize an incumbent’s terms in office.

Therefore, under the rhetorical guise of warding off corruption, an incumbent congressman is happy to limit himself to small donations. Certainly, he may detest the phone calls he has to make and the fundraising breakfasts, lunches, and dinners he has to attend. But at night he sleeps well in the knowledge that his challenger back home in his district must do the same (more, if the challenger is serious about winning) without, in most cases, a comparable network of contacts, donors, and lobbyists whose longstanding collective investment in the incumbent’s career ensures their continuing financial commitment.

With almost three decades of empirical evidence to reflect upon, it is clear that U.S.-style donation limits have two insidious consequences. First, they greatly reduce the likelihood that a challenger will successfully oust an incumbent (the current re-election rate for congressmen is 98%), thereby reducing the level of competition necessary for a healthy political system.

And, second, such long odds against success provide an enormous disincentive for qualified, successful people to put themselves forward as candidates in the first place. This thereby reduces the quality of the pool of potential challengers and would-be successors should — by scandal, death, or resignation — an incumbent fail to gain or seek reelection.

American experience suggests that the campaign to eradicate political corruption is primarily successful at destroying political competition and thereby gradually eroding political freedom. Hence the task of reform should be approached with the utmost caution and modesty. Canada already mistakenly limits campaign spending. But she shouldn’t compound the flaws of her own campaign finance system by importing the worst aspect of her neighbor’s: an equally mistaken limit on donations.

Patrick Basham is senior fellow in the Center for Representative Government at the Cato Institute.