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Party Activists, Campaign Funding and the Quality of Government

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  • John Maloney
  • Andrew Pickering

Abstract

We study the formation of government policy in democracies when turnout depends on party activists and campaign spending ‐ parties’ ‘political capital’. The functional importance of political capital determines equilibrium rent-seeking in government. Often the more potent political capital is the greater the extent of rent-seeking. Limiting the level of political capital is distinct from reducing its potency, and whereas we find a strong case for reducing potency we find that placing limits on campaign spending are rarely optimal, and in particular that weak limits are never optimal. A limit on total campaign spending can increase government quality under certain conditions and if so then strong limits are always better than weak limits. However, finite limits on either national or local campaign spending alone, as often seen in practice, are never optimal.

Suggested Citation

  • John Maloney & Andrew Pickering, 2010. "Party Activists, Campaign Funding and the Quality of Government," The Centre for Market and Public Organisation 10/252, The Centre for Market and Public Organisation, University of Bristol, UK.
  • Handle: RePEc:bri:cmpowp:10/252
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    File URL: http://www.bristol.ac.uk/cmpo/publications/papers/2010/wp252.pdf
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    References listed on IDEAS

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    1. Torsten Persson & Guido Tabellini & Francesco Trebbi, 2003. "Electoral Rules and Corruption," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 958-989, June.
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    3. Gerber, Alan S. & Green, Donald P., 2000. "The Effects of Canvassing, Telephone Calls, and Direct Mail on Voter Turnout: A Field Experiment," American Political Science Review, Cambridge University Press, vol. 94(3), pages 653-663, September.
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    7. Moon, Woojin, 2006. "The Paradox of Less Effective Incumbent Spending: Theory and Tests," British Journal of Political Science, Cambridge University Press, vol. 36(4), pages 705-721, October.
    8. Moon, Woojin, 2004. "Party Activists, Campaign Resources and Candidate Position Taking: Theory, Tests and Applications," British Journal of Political Science, Cambridge University Press, vol. 34(4), pages 611-633, October.
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    Cited by:

    1. John Maloney & Andrew Pickering, 2013. "Political Competition, Political Donations, Economic Policy and Growth," Discussion Papers 13/21, Department of Economics, University of York.
    2. John Maloney & Andrew Pickering, 2018. "The Economic Consequences of Political Donation Limits," Economica, London School of Economics and Political Science, vol. 85(339), pages 479-517, July.

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    More about this item

    Keywords

    Party activists; campaign funding; rent-seeking; political finance;
    All these keywords.

    JEL classification:

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

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