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The Determinants of Campaign Spending: The Role of the Government Jackpot


  • Palda, Filip


To raise money for their campaigns, political candidates auction a part of government wealth (the jackpot) to contributors. The larger the jackpot, the more candidates spend. Data on the gubernatorial races of 1978 and 1986 indicate that (1) for every dollar increase in the per capita jackpot, campaign spending rises by 0.0004 cents per voter; (2) balanced budget laws hinder the candidate's ability to raise money; and (3) in states that give the governor more power over the budget (measured by a "Schlesinger" index), candidates raise more. The paper emphasizes that candidates willingly limit their spending to avoid indebtedness to contributors. Copyright 1992 by Oxford University Press.

Suggested Citation

  • Palda, Filip, 1992. "The Determinants of Campaign Spending: The Role of the Government Jackpot," Economic Inquiry, Western Economic Association International, vol. 30(4), pages 627-638, October.
  • Handle: RePEc:oup:ecinqu:v:30:y:1992:i:4:p:627-38

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    References listed on IDEAS

    1. Eckbo, B. Espen, 1983. "Horizontal mergers, collusion, and stockholder wealth," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 241-273, April.
    2. Ordover, Janusz A & Saloner, Garth & Salop, Steven C, 1990. "Equilibrium Vertical Foreclosure," American Economic Review, American Economic Association, vol. 80(1), pages 127-142, March.
    3. Michael A. Salinger, 1988. "Vertical Mergers and Market Foreclosure," The Quarterly Journal of Economics, Oxford University Press, vol. 103(2), pages 345-356.
    4. Jensen, Michael C. & Ruback, Richard S., 1983. "The market for corporate control : The scientific evidence," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 5-50, April.
    5. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    6. Allen, Bruce T, 1971. "Vertical Integration and Market Foreclosure: The Case of Cement and Concrete," Journal of Law and Economics, University of Chicago Press, vol. 14(1), pages 251-274, April.
    7. Dodd, Peter, 1980. "Merger proposals, management discretion and stockholder wealth," Journal of Financial Economics, Elsevier, vol. 8(2), pages 105-137, June.
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    Cited by:

    1. Filip Palda, 2002. "Campaign Finance: An Introduction to the Field," Public Economics 0209005, EconWPA.
    2. Joaquín Artés & Enrique Viñuela, 2007. "Campaign spending and office-seeking motivations: an empirical analysis," Public Choice, Springer, vol. 133(1), pages 41-55, October.
    3. David R. Stockman, 2001. "Balanced-Budget Rules: Welfare Loss and Optimal Policies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(2), pages 438-459, July.
    4. Pastine, Ivan & Pastine, Tuvana, 2012. "Incumbency advantage and political campaign spending limits," Journal of Public Economics, Elsevier, vol. 96(1), pages 20-32.
    5. Ivan Pastine & Tuvana Pastine, 2010. "Political campaign spending limits," Working Papers 201034, School of Economics, University College Dublin.
    6. Filip Palda, 2001. "Election Finance Regulation in Emerging Democracies: Lessons from Canada and the U.S," Public Economics 0111010, EconWPA.
    7. Potters, Jan & Sloof, Randolph, 1996. "Interest groups: A survey of empirical models that try to assess their influence," European Journal of Political Economy, Elsevier, vol. 12(3), pages 403-442, November.
    8. Gregory Randolph, 2011. "The voter initiative and the power of the governor: evidence from campaign expenditures," Constitutional Political Economy, Springer, vol. 22(3), pages 265-286, September.

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