IDEAS home Printed from https://ideas.repec.org/a/tpr/jeurec/v2y2004i5p772-804.html
   My bibliography  Save this article

Political Competition with Campaign Contributions and Informative Advertising

Author

Listed:
  • Stephen Coate

    (Cornell University,)

Abstract

This paper presents a theory of political competition with campaign contributions and informa-tive political advertising. Policy-motivated parties compete by selecting candidates and interest groups provide contributions to enhance the electoral prospects of like-minded candidates. Con-tributions are used to finance advertising campaigns that provide voters with information about candidates' ideologies. Voters update their beliefs rationally given the information they have received. The paper uses the theory to analyze the welfare economics of contribution limits. Such limits are shown to redistribute welfare from ordinary citizens to members of interest groups. (JEL: D72, H40) Copyright (c) 2004 by the European Economic Association.

Suggested Citation

  • 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.
  • Handle: RePEc:tpr:jeurec:v:2:y:2004:i:5:p:772-804
    as

    Download full text from publisher

    File URL: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1542-4774/issues
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Persson, Torsten & Tabellini, Guido, 1999. "Political economics and macroeconomic policy," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 22, pages 1397-1482, Elsevier.
    2. Ignacio Ortuno‐Ortín & 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.
    3. Rebecca Morton & Charles Cameron, 1992. "Elections And The Theory Of Campaign Contributions: A Survey And Critical Analysis," Economics and Politics, Wiley Blackwell, vol. 4(1), pages 79-108, March.
    4. Nelson, Phillip, 1976. "Political Information," Journal of Law and Economics, University of Chicago Press, vol. 19(2), pages 315-336, August.
    5. Gene M. Grossman & Carl Shapiro, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Oxford University Press, vol. 51(1), pages 63-81.
    6. David Austen-Smith, 1987. "Interest groups, campaign contributions, and probabilistic voting," Public Choice, Springer, vol. 54(2), pages 123-139, January.
    7. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
    8. Potters, Jan & Sloof, Randolph & van Winden, Frans, 1997. "Campaign expenditures, contributions and direct endorsements: The strategic use of information and money to influence voter behavior," European Journal of Political Economy, Elsevier, vol. 13(1), pages 1-31, February.
    9. Martin J. Osborne & Al Slivinski, 1996. "A Model of Political Competition with Citizen-Candidates," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 65-96.
    10. Timothy Besley & Stephen Coate, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 85-114.
    11. Roger Congleton, 1986. "Rent-seeking aspects of political advertising," Public Choice, Springer, vol. 49(3), pages 249-263, January.
    12. Andrea Prat, 2002. "Campaign Advertising and Voter Welfare," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 999-1017.
    13. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 265-286.
    14. Prat, Andrea, 2002. "Campaign Spending with Office-Seeking Politicians, Rational Voters, and Multiple Lobbies," Journal of Economic Theory, Elsevier, vol. 103(1), pages 162-189, March.
    15. Besley, Timothy & Coate, Stephen, 2008. "Issue Unbundling via Citizens' Initiatives," Quarterly Journal of Political Science, now publishers, vol. 3(4), pages 379-397, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stephen Coate, 2003. "Power-hungry Candidates, Policy Favors, and Pareto Improving Campaign Finance Policy," NBER Working Papers 9601, National Bureau of Economic Research, Inc.
    2. Prat, A., 1998. "Campaign Spending with Office-Seeking Politicians, Rational Voters and Multiple Lobbies," Other publications TiSEM 30b6424e-efe1-48c7-9709-7, Tilburg University, School of Economics and Management.
    3. Thomas Bassetti & Filippo Pavesi, 2017. "Electoral Contributions And The Cost Of Unpopularity," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1771-1791, October.
    4. Prat, Andrea, 2002. "Campaign Spending with Office-Seeking Politicians, Rational Voters, and Multiple Lobbies," Journal of Economic Theory, Elsevier, vol. 103(1), pages 162-189, March.
    5. Thomas Stratmann, 2003. "Tainted Money? Contribution Limits and the Effectiveness of Campaign Spending," CESifo Working Paper Series 1044, CESifo.
    6. Daniel Houser & Thomas Stratmann, 2008. "Selling favors in the lab: experiments on campaign finance reform," Public Choice, Springer, vol. 136(1), pages 215-239, July.
    7. Leonardo Felli & Antonio Merlo, 2006. "Endogenous Lobbying," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 180-215, March.
    8. Mazza, Isidoro & van Winden, Frans, 2008. "An endogenous policy model of hierarchical government," European Economic Review, Elsevier, vol. 52(1), pages 133-149, January.
    9. Juan Carlos Berganza, 2000. "Politicians, voters and electoral processes: an overview," Investigaciones Economicas, Fundación SEPI, vol. 24(3), pages 501-543, September.
    10. Christoph Vanberg, 2005. "“One Man, One Dollar”? Examining the equalization argument in support of campaign contribution limits," Public Economics 0512001, University Library of Munich, Germany.
    11. Andrea Prat, 2002. "Campaign Advertising and Voter Welfare," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 999-1017.
    12. Hans Gersbach, 2014. "Campaigns, political mobility, and communication," Public Choice, Springer, vol. 161(1), pages 31-49, October.
    13. Hans Gersbach, 2014. "Campaigns, political mobility, and communication," Public Choice, Springer, vol. 161(1), pages 31-49, October.
    14. Pastine, Ivan & Pastine, Tuvana, 2012. "Incumbency advantage and political campaign spending limits," Journal of Public Economics, Elsevier, vol. 96(1), pages 20-32.
    15. Prat, A., 1997. "Campaign Advertising and Voter Welfare," Other publications TiSEM f8eafa82-fa74-4556-a34d-0, Tilburg University, School of Economics and Management.
    16. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July.
    17. Leonardo Felli & Antonio Merlo, 2006. "Endogenous Lobbying," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 180-215, March.
    18. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    19. Scott Gehlbach & Konstantin Sonin & Ekaterina Zhuravskaya, 2010. "Businessman Candidates," American Journal of Political Science, John Wiley & Sons, vol. 54(3), pages 718-736, July.
    20. Julia Cage & Yasmine Bekkouche, 2018. "The Price of a Vote: Evidence from France, 1993-2014," Sciences Po publications 12614, Sciences Po.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:jeurec:v:2:y:2004:i:5:p:772-804. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.mitpressjournals.org/jeea .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ann Olson (email available below). General contact details of provider: http://www.mitpressjournals.org/jeea .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.