Political Contributions and Insurance
AbstractWe propose a mechanism that eliminates the incentive for risk-averse agents to influence government policy via political contributions. The mechanism requires the government to create a political insurance exchange where agents can insure against the outcome of a government decision and firms selling insurance announce and commit to a price of insurance and their political contributions. If the exchange contains actuarially fair priced insurance, then the agent fully insures and neither the firm nor agent lobbies the government. The exchange is better than contribution limits because it is welfare-enhancing, more fair, and does not restrict speech.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 1204.
Length: 11 pages
Date of creation: Dec 2012
Date of revision:
Contact details of provider:
Fax: (508) 793-3708
Web page: http://www.holycross.edu/departments/economics/website/
More information through EDIRC
Campaign finance; complete markets; insurance; lobbying; political contributions;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies
- M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-15 (All new papers)
- NEP-IAS-2012-12-15 (Insurance Economics)
- NEP-IPR-2012-12-15 (Intellectual Property Rights)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- de Figueiredo, John M & Silverman, Brian S, 2006. "Academic Earmarks and the Returns to Lobbying," Journal of Law and Economics, University of Chicago Press, vol. 49(2), pages 597-625, October.
- De Figueiredo, John M. & Silverman, Brian S., 2002.
"Academic Earmarks and the Returns to Lobbying,"
4245-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Levitt, Steven D, 1994. "Using Repeat Challengers to Estimate the Effect of Campaign Spending on Election Outcomes in the U.S. House," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 777-98, August.
- Stephen Ansolabehere & John M. de Figueiredo & James M. Snyder Jr, 2003. "Why is There so Little Money in U.S. Politics?," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 105-130, Winter.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson).
If references are entirely missing, you can add them using this form.