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Political Support for a Private System of Financing Political Campaigns

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  • Jenny De Freitas

Abstract

In a context where parties announce an income tax and spend contributions received in campaign advertising, we compare two methods of financing political campaigns: the public and the private system. Under the public system, parties receive public funds in proportion to their voting share. Under the private system, voters contribute to political campaigns to increase a party's probability of winning. Competition for contributions may induce excessive campaign spending under the private system. Still, it may be supported by a majority of voters, given the indirect effect contributions have on the equilibrium tax and a party's probability of winning.

Suggested Citation

  • 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.
    • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(291112)67:4_352:psfaps_2.0.tx_2-q
    DOI: 10.1628/001522108X614169
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    Cited by:

    1. Daniel Cardona & Jenny Freitas & Antoni Rubí-Barceló, 2023. "Polarization and conflict among groups with heterogeneous members," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 61(1), pages 199-219, July.

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    More about this item

    Keywords

    political economy; redistribution; campaign finance;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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