The Effect of War Chests on Challenger Entry in U.S. House Elections

chest deters potential challengers from entering a congressional race. I discuss theoretical arguments for and against deterrence. I find that previous analyses of war chests have omitted important variables, and thus, their conclusions are suspect. Using data from the 1984-1998 U.S. House elections, I employ a bivariate probit model with sample selection to test whether large war chests deter highor low-quality challengers from entering a race. Once previously omitted variables are included, I find that war chests do not deter challengers. C onventional wisdom states that an incumbent with a large war chest will deter challengers. Since the surest way to get reelected is to run without opposition, incumbents may carry a large war chest to prevent other candidates from running. And if incumbents cannot prevent all opponents from entering the race, incumbents may use war chests to try to deter strong opponents from running. Although there are many forces over which incumbents have little control (e.g., national partisan tides), incumbents can control how much cash they have at the beginning of the subsequent election cycle by not spending some of their money in the current election. Because a war chest is often seen as one of the unfair methods by which an incumbent remains entrenched in power, some campaign finance reforms have proposed that incumbents not be allowed to carry over any unspent money from one election to the next. For example, "through an initiative Missouri voters passed a 'spend-down' provision. It required candidates to return to contributors or to turn over to the state all but a little money left unspent from their campaigns. Its aim was to prevent candidates from amassing war chests in one election for use in another" (Corrado et al. 1997, 353; see also Donovan 1993). I examine here whether an incumbent can use a war chest to affect his or her odds of winning. Specifically, can a war chest be used to deter a high (or low) quality challenger from entering? I find, contrary to previous analyses, that war chests do not deter challengers.