Funding Asymmetries in Electoral Competition: How important is a level playing field?
AbstractI 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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Bibliographic InfoPaper provided by EconWPA in its series Public Economics with number 0402002.
Length: 30 pages
Date of creation: 06 Feb 2004
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Elections; Campaign Finance; Parties; Campaign Contributions; Asymmetries; Voting;
Find related papers by JEL classification:
- D6 - Microeconomics - - Welfare Economics
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- H - Public Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-08 (All new papers)
- NEP-CDM-2004-02-08 (Collective Decision-Making)
- NEP-MIC-2004-02-08 (Microeconomics)
- NEP-PBE-2004-02-08 (Public Economics)
- NEP-POL-2004-02-08 (Positive Political Economics)
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