Resource windfalls and political sabotage: Evidence from 5.2 million political ads

Abstract We study the role of incentives in inducing sabotage in political contents, vis‐à‐vis natural resource windfalls. The latter induce plausibly exogenous increases in contests' stakes by extending opportunities for policy implementation or private gain upon winning and enhancing incumbent advantage. A model of political contests with endogenous sabotage indicates that higher stakes increase sabotage in political campaigns. We validate these predictions using over 5 million TV ads from United States gubernatorial elections (2010–2020), leveraging plausibly exogenous variations in states' natural resource endowments. Results show that resource windfalls significantly escalate negative campaigning: A standard deviation increase in resource windfalls leads to a 10% rise in campaign negativity. We show that this effect is primarily fueled by corruption and observed most strongly in symmetric, more competitive environments.