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Compulsory Voting and Public Finance

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Conventional wisdom suggests that compulsory voting lowers the influence of specialinterest groups and leads to policies that are better for less privileged citizens, who often abstain when voting is voluntary. To scrutinize this conventional wisdom, I study public goods provision and rents to specialinterest groups in a probabilistic voting model with campaign contributions in which citizens can decide how much political information to acquire, and whether to vote or abstain. I find that compulsory voting, modeled as an increase in abstention costs, raises the share of poorly informed and impressionable voters, thereby making special-interest groups more influential and increasing their rents. Total government spending and taxes increase as well, while the effect on public goods provision is ambiguous. Compulsory voting may thus lead to policy changes that harm even less privileged citizens.

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Paper provided by Swiss National Bank, Study Center Gerzensee in its series Working Papers with number 10.04.

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Length: 25 pages
Date of creation: Nov 2010
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Handle: RePEc:szg:worpap:1004

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  1. Krasa, Stefan & Polborn, Mattias K., 2009. "Is mandatory voting better than voluntary voting?," Games and Economic Behavior, Elsevier, vol. 66(1), pages 275-291, May.
  2. Andrea Prat, 2002. "Campaign Advertising and Voter Welfare," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 999-1017.
  3. Prat, A., 1998. "Campaign Spending with Office-Seeking Politicians, Rational Voters and Multiple Lobbies," Discussion Paper 1998-123, Tilburg University, Center for Economic Research.
  4. Larcinese Valentino, 2005. "Electoral Competition and Redistribution with Rationally Informed Voters," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-28, June.
  5. Matsusaka, John G, 1995. " Explaining Voter Turnout Patterns: An Information Theory," Public Choice, Springer, vol. 84(1-2), pages 91-117, July.
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