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Public Funding Of Political Parties

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Author Info
Christian Schultz (University of Copenhagen)
Ignacio Ortuño Ortín (Universidad de Alicante)

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Abstract

This paper concerns public funding of parties. Parties receive public funds depending on their vote share. Funds finance electoral campaigns. Two cases are investigated. In the first some voters are policy motivated and some are "impressionable" - their vote depends directly on campaign expenditures. In the second campaigning is informative and all voters are policy motivated. Public funds increase policy convergence in both cases. The effect is larger, the more funding depends on vote shares. When campaigns are informative, there may be multiple equilibria. Intuitively, a large party can stay large since it receives large funds.

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2000-27.pdf
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File Function: Fisrt version / Primera version, 2000
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Publisher Info
Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2000-27.

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Length: 42 pages
Date of creation: Nov 2000
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2000-27

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Related research
Keywords: Public Funding; Political Competition; Information.;

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References listed on IDEAS
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.:
  1. Ignacio OrtuÓo-OrtÎn, 1997. "A spatial model of political competition and proportional representation," Social Choice and Welfare, Springer, vol. 14(3), pages 427-438. [Downloadable!] (restricted)
  2. Torsten Persson & Guido Tabellini, 1999. "Political Economics and Public Finance," NBER Working Papers 7097, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Grossman, Gene M & Shapiro, Carl, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Blackwell Publishing, vol. 51(1), pages 63-81, January. [Downloadable!] (restricted)
  4. Grossman, Gene M & Helpman, Elhanan, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Blackwell Publishing, vol. 63(2), pages 265-86, April. [Downloadable!] (restricted)
    Other versions:
  5. Mueller, Dennis C & Stratmann, Thomas, 1994. " Informative and Persuasive Campaigning," Public Choice, Springer, vol. 81(1-2), pages 55-77, October.
  6. Brock, William A & Magee, Stephen P, 1978. "The Economics of Special Interest Politics: The Case of the Tariff," American Economic Review, American Economic Association, vol. 68(2), pages 246-50, May. [Downloadable!] (restricted)
  7. James W. Friedman, 1983. "Advertising and Oligopolistic Equilibrium," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 464-473, Autumn. [Downloadable!] (restricted)
  8. McKelvey, Richard D. & Ordeshook, Peter C., 1987. "Elections with limited information: A multidimensional model," Mathematical Social Sciences, Elsevier, vol. 14(1), pages 77-99, August. [Downloadable!] (restricted)
  9. Ignacio Ortuno-Ortin & Anke Gerber, 1998. "Political compromise and endogenous formation of coalitions," Social Choice and Welfare, Springer, vol. 15(3), pages 445-454. [Downloadable!] (restricted)
  10. Butters, Gerard R, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Blackwell Publishing, vol. 44(3), pages 465-91, October. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Jenny De Freitas, 2009. "Political support for the private system to finance political parties," DEA Working Papers 35, Universitat de les Illes Balears, Departament d'Economía Aplicada. [Downloadable!]
  2. Amihai Glazer & Mark Gradstein, 2005. "Elections with contribution-maximizing candidates," Public Choice, Springer, vol. 122(3), pages 467-482, March. [Downloadable!] (restricted)
  3. Thomas Stratmann, 2003. "Tainted Money? Contribution Limits and the Effectiveness of Campaign Spending," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. Stephen Coate, 2001. "Political Competition with Campaign Contributions and Informative Advertising," NBER Working Papers 8693, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Westermark, Andreas, 2001. "Campaigning and Ambiguity when Parties Cannot Make Credible Election Promises," Working Paper Series 568, Research Institute of Industrial Economics. [Downloadable!]
  6. Christian Schultz, 2003. "Strategic Campaigns and Redistributive Politics," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  7. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July. [Downloadable!] (restricted)
  8. Thomas Stratmann & Francisco J. & Aparicio-Castillo, 2006. "Competition policy for elections: Do campaign contribution limits matter?," Public Choice, Springer, vol. 127(1), pages 177-206, April. [Downloadable!] (restricted)
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