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Populism, Partisanship, and the Funding of Political Campaigns

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  • Tilman Klumpp

Abstract

We deem populism as a politician's effort to appeal to a large group of voters with limited information regarding a policy-relevant state of nature. In our model, the populist motive makes it impossible for political candidates to communicate their information to voters credibly. We show that the presence of special interest groups (SIGs) with partisan preferences can mitigate this e ffect and thereby improve policy. This does not happen because SIGs are better informed than policy makers. Instead, campaign contributions by SIGs allow politicians to insulate themselves from the need to adopt populist platforms. We show that a regime in which SIGs are allowed to contribute to political campaigns welfare-dominates (ex ante) regimes in which no such contributions are allowed, or where campaigns are publicly nuanced, or where they are funded by the candidates' private wealth.

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Paper provided by Department of Economics, Emory University (Atlanta) in its series Emory Economics with number 1107.

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Date of creation: Apr 2011
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Handle: RePEc:emo:wp2003:1107

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  1. : Christian Schultz, . "Polarization and Inefficient Policies," Discussion Papers 93-16, University of Copenhagen. Department of Economics.
  2. David Austen-Smith, 1987. "Interest groups, campaign contributions, and probabilistic voting," Public Choice, Springer, vol. 54(2), pages 123-139, January.
  3. Mike Felgenhauer, 2012. "Revealing information in electoral competition," Public Choice, Springer, vol. 153(1), pages 55-68, October.
  4. Baye, M.R. & Kovenock, D. & De Vries, C., 1992. "The All-Pay Auction with Complete Information," Papers 8-92-1, Pennsylvania State - Department of Economics.
  5. : Christian Schultz, . "The Politics of Persuasion when Voters are Rational," Discussion Papers 93-15, University of Copenhagen. Department of Economics.
  6. Martinelli, Cesar, 2001. " Elections with Privately Informed Parties and Voters," Public Choice, Springer, vol. 108(1-2), pages 147-67, July.
  7. Martinelli, Cesar & Matsui, Akihiko, 2002. " Policy Reversals and Electoral Competition with Privately Informed Parties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(1), pages 39-61.
  8. Helios Herrera & David K. Levine & Cesar Martinelli, 2005. "Policy Platforms, Campaign Spending and Voter Participation," Working Papers 0503, Centro de Investigacion Economica, ITAM.
  9. Heidhues, Paul & Lagerlof, Johan, 2003. "Hiding information in electoral competition," Games and Economic Behavior, Elsevier, vol. 42(1), pages 48-74, January.
  10. Jean-François Laslier & Karine Straeten, 2004. "Electoral competition under imperfect information," Economic Theory, Springer, vol. 24(2), pages 419-446, August.
  11. Schultz, Christian, 2002. "Policy biases with voters' uncertainty about the economy and the government," European Economic Review, Elsevier, vol. 46(3), pages 487-506, March.
  12. Thomas Jensen, 2013. "Elections, Information, and State-Dependent Candidate Quality," Discussion Papers 13-03, University of Copenhagen. Department of Economics.
  13. Schultz, Christian, 2008. "Information, polarization and term length in democracy," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1078-1091, June.
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Cited by:
  1. Klumpp, Tilman & Mialon, Hugo & Williams, Michael, 2012. "Matching Funds in Public Campaign Finance," Working Papers 2012-20, University of Alberta, Department of Economics.

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