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Political Competition, Political Donations, Economic Policy and Growth

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  • John Maloney
  • Andrew Pickering

Abstract

Greater political competition reduces the extent of rent-seeking or resource diversion by politicians in government. However, the potency of this effect depends on whether or not there are limits on donations to candidates standing for election, and on the objectives of donors themselves. Data from the US states suggest that the corruption-political competition gradient is stronger under laissez-faire regimes. Consistent with our notion of 'weakly benign' donors, limits are associated with better policies and stronger growth performance at low levels of political competition, whilst laissez-faire is preferred when political competition is high.

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Bibliographic Info

Paper provided by Department of Economics, University of York in its series Discussion Papers with number 13/21.

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Date of creation: Aug 2013
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Handle: RePEc:yor:yorken:13/21

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Keywords: political competition; political donations; rent-seeking; economic policy; growth;

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  1. George Stigler, 1972. "Economic competition and political competition," Public Choice, Springer, vol. 13(1), pages 91-106, September.
  2. Prat, A., 1997. "Campaign Advertising and Voter Welfare," Discussion Paper 1997-118, Tilburg University, Center for Economic Research.
  3. Alan Gerber, 2004. "Does campaign spending work?," Natural Field Experiments 00246, The Field Experiments Website.
  4. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
  5. John Lott, 2006. "Campaign finance reform and electoral competition," Public Choice, Springer, vol. 129(3), pages 263-300, December.
  6. 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.
  7. John Maloney & Andrew C. Pickering, 2013. "Party Activists, Campaign Funding, and the Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 29(1), pages 210-238, February.
  8. Marie Rekkas, 2007. "The Impact of Campaign Spending on Votes in Multiparty Elections," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 573-585, August.
  9. 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.
  10. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July.
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