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Public Funding of Political Parties

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  • IGNACIO ORTUNO-ORTIN
  • CHRISTIAN SCHULTZ

Abstract

This paper studies the typical European system for public funding of parties, where parties receive public funds depending on their vote share. These funds finance electoral campaigns. It is shown that such a funding system increases policy convergence. The effect is larger, the more funding depends on vote shares. If the parties have access to other means of campaign finance given in a lump-sum way, the effect is moderated. Copyright 2005 Blackwell Publishing Inc..

Suggested Citation

  • Ignacio Ortuno-Ortin & Christian Schultz, 2005. "Public Funding of Political Parties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(5), pages 781-791, December.
  • Handle: RePEc:bla:jpbect:v:7:y:2005:i:5:p:781-791
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    References listed on IDEAS

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    1. Ignacio OrtuÓo-OrtÎn, 1997. "A spatial model of political competition and proportional representation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(3), pages 427-438.
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    3. Ignacio Ortuno-Ortin & Christian Schultz, 2005. "Public Funding of Political Parties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(5), pages 781-791, December.
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    7. Ignacio Ortuno-Ortin & Anke Gerber, 1998. "Political compromise and endogenous formation of coalitions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 15(3), pages 445-454.
    8. Mueller, Dennis C & Stratmann, Thomas, 1994. "Informative and Persuasive Campaigning," Public Choice, Springer, vol. 81(1-2), pages 55-77, October.
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    10. repec:cup:apsrev:v:88:y:1994:i:01:p:33-47_09 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Jenny De Freitas, 2011. "Political Support for a Private System of Financing Political Campaigns," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 67(4), pages 352-377, December.
    2. Hans Gersbach, 2014. "Campaigns, political mobility, and communication," Public Choice, Springer, vol. 161(1), pages 31-49, October.
    3. Christian Schultz, 2007. "Strategic Campaigns and Redistributive Politics," Economic Journal, Royal Economic Society, vol. 117(522), pages 936-963, July.
    4. Amihai Glazer & Mark Gradstein, 2005. "Elections with contribution-maximizing candidates," Public Choice, Springer, vol. 122(3), pages 467-482, March.
    5. Thomas Stratmann, 2003. "Tainted Money? Contribution Limits and the Effectiveness of Campaign Spending," CESifo Working Paper Series 1044, CESifo Group Munich.
    6. Stephen Coate, 2004. "Political Competition with Campaign Contributions and Informative Advertising," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 772-804, September.
    7. Ignacio Ortuno-Ortin & Christian Schultz, 2005. "Public Funding of Political Parties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(5), pages 781-791, December.
    8. 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.
    9. Hans Gersbach, 2014. "Government Debt-Threshold Contracts," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 444-458, January.
    10. Köppl-Turyna, Monika, 2017. "Public funding of parties and political polarization," Working Papers 03, Agenda Austria.
    11. Gersbach, Hans & Schneider, Maik T., 2012. "Tax contracts and elections," European Economic Review, Elsevier, vol. 56(7), pages 1461-1479.
    12. Westermark, Andreas, 2004. "Extremism, campaigning and ambiguity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 421-452, May.
    13. 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.
    14. Westermark, Andreas, 2001. "Campaigning and Ambiguity when Parties Cannot Make Credible Election Promises," Working Paper Series 568, Research Institute of Industrial Economics.
    15. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July.
    16. Ossokina, Ioulia V. & Swank, Otto H., 2004. "The optimal degree of polarization," European Journal of Political Economy, Elsevier, vol. 20(1), pages 255-262, March.
    17. Köppl Turyna, Monika, 2015. "How asymmetric funding of parties can lead to political polarization," MPRA Paper 64200, University Library of Munich, Germany.
    18. Troumpounis, Orestis, 2012. "On the distribution of public funding to political parties," Economics Letters, Elsevier, vol. 116(3), pages 367-370.

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