The effect of the competitive balance on congressional incumbents' financial patterns

My purpose is to investigate the fundraising behavior of incumbents as it relates to the accumulation of cash-on-hand. I ask whether cash-on-hand and fundraising are analytically distinct or similar in terms of their electoral purposes, and using data from the 1992–2000 election cycles find that incumbents' fundraising efforts signal electoral vulnerability—and incumbents' seldom invest in fundraising in order to enhance an already generous war chest. I suggest, therefore, that the accumulation of a war chest generally does not result from a strategic choice by incumbents to engage in aggressive fundraising, but rather an unintended consequence over time of representing an inherently safe district and having to spend little on re-election.; I propose that both safe seats, and campaign finance, measured through cash-on-hand and fundraising, are possibly explained by district level demographics. Incumbents in competitive districts, districts in which both the Democratic and Republican parties have a near equal number of supporters, should expect to face consistently close elections leaving little left in cash-on-hand. Conversely, Incumbents in noncompetitive districts, districts in which one party dominates the other in terms of membership, should expect easy re-election over time and accumulate a large amount of cash-on-hand.; I find that cash-on-hand and receipts are generated under different election circumstances. The two types of money, therefore, provide different information about incumbents and should be included separately in campaign finance models. I also find that the war chest hypothesis cannot explain why some candidates have safe seats and others experience close races. I find that cash-on-hand is accumulated after incumbents establish safe seats.; Finally, I find that receipts are a function of the competitiveness of a district and large cash reserves are a residual of easy reelection and are accumulated by incumbents who raise more money than they needed, not by design. Incumbents from competitive districts hold an advantage over incumbents from noncompetitive districts not by strategic design but by living in a district in which the incumbents' party demographically dominates the electorate. The competitiveness of elections is therefore beyond incumbents' control as it is a function of district demographics, not campaign finance.