Partisan Politics and Congressional Election Prospects: Evidence from the Iowa Electronic Markets

Abstract

Using the Iowa Electronic Markets (IEM), this article assesses the political impact of several important events during the fall of 2013: the US government shutdown, the Senate elimination of filibusters for presidential nominations (i.e., the nuclear option), and the implementation of the Patient Protection and Affordable Care Act (i.e., ObamaCare). Did these events have meaningful effects on congressional control prospects in the 2014 election? According to IEM price changes, Republican chances fell dramatically when the government shut down, and they did not recover on resolution. Eliminating filibusters had a negative impact on Democratic chances. Various aspects of the ObamaCare rollout and reporting, as well as new announcements that incumbents would not run for reelection, had little effect. In contrast, the budget resolution reinforced the status quo. Overall, political rhetoric does not appear to affect congressional control prospects. Instead, actions matter: deliberate partisan actions of Congress adversely affect the initiating party's prospects, whereas bipartisan initiatives help the party that initiates the bipartisan effort.