I investigate the idea that campaign spending limits may help to level the playing field in electoral competition between parties who have unequal access to campaign funds. The model assumes that the supporters of one party are on average wealthier than those who support a competing party. Contributions are used to finance advertisements that truthfully reveal information about the quality of candidates. Voters update their beliefs rationally based on information revealed during the campaign. Rational beliefs are shown to compensate for funding asymmetries in equilibrium. As a result, asymmetries in access to funds do not bias the electoral outcome from an ex ante perspective. A limit on campaign expenditures does not affect the relative chances of the two parties, while leading to unintended negative consequences. I conclude that the level playing field argument in support of expenditure limitations is inconsistent with the key assumptions of the analysis and offer some suggestions for future research.
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Paper provided by EconWPA in its series Public Economics with number
0402002.
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.:
Timothy J. Feddersen & Wolfgang Pesendorfer, 1995.
"The Swing Voter's Curse,"
Discussion Papers
1064, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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