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Populism, Partisanship, and the Funding of Political Campaigns

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  • Tilman Klumpp

Abstract

We deem populism as a politician's effort to appeal to a large group of voters with limited information regarding a policy-relevant state of nature. In our model, the populist motive makes it impossible for political candidates to communicate their information to voters credibly. We show that the presence of special interest groups (SIGs) with partisan preferences can mitigate this e ffect and thereby improve policy. This does not happen because SIGs are better informed than policy makers. Instead, campaign contributions by SIGs allow politicians to insulate themselves from the need to adopt populist platforms. We show that a regime in which SIGs are allowed to contribute to political campaigns welfare-dominates (ex ante) regimes in which no such contributions are allowed, or where campaigns are publicly nuanced, or where they are funded by the candidates' private wealth.

Suggested Citation

  • Tilman Klumpp, 2011. "Populism, Partisanship, and the Funding of Political Campaigns," Emory Economics 1107, Department of Economics, Emory University (Atlanta).
  • Handle: RePEc:emo:wp2003:1107
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    References listed on IDEAS

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    1. Schultz, Christian, 1995. " The Politics of Persuasion When Voters Are Rational," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(3), pages 357-368, September.
    2. Schultz, Christian, 2008. "Information, polarization and term length in democracy," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1078-1091, June.
    3. Herrera, Helios & Levine, David K. & Martinelli, César, 2008. "Policy platforms, campaign spending and voter participation," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 501-513, April.
    4. Dan Kovenock & Michael R. Baye & Casper G. de Vries, 1996. "The all-pay auction with complete information (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 291-305.
    5. Heidhues, Paul & Lagerlof, Johan, 2003. "Hiding information in electoral competition," Games and Economic Behavior, Elsevier, vol. 42(1), pages 48-74, January.
    6. repec:cup:apsrev:v:92:y:1998:i:04:p:809-827_21 is not listed on IDEAS
    7. Schultz, Christian, 2002. "Policy biases with voters' uncertainty about the economy and the government," European Economic Review, Elsevier, vol. 46(3), pages 487-506, March.
    8. Martinelli, Cesar & Matsui, Akihiko, 2002. " Policy Reversals and Electoral Competition with Privately Informed Parties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(1), pages 39-61.
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    10. Jean-François Laslier & Karine Straeten, 2004. "Electoral competition under imperfect information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 24(2), pages 419-446, August.
    11. David Austen-Smith, 1987. "Interest groups, campaign contributions, and probabilistic voting," Public Choice, Springer, vol. 54(2), pages 123-139, January.
    12. : Christian Schultz, "undated". "Polarization and Inefficient Policies," Discussion Papers 93-16, University of Copenhagen. Department of Economics.
    13. Mike Felgenhauer, 2012. "Revealing information in electoral competition," Public Choice, Springer, vol. 153(1), pages 55-68, October.
    14. repec:cup:apsrev:v:89:y:1995:i:03:p:566-581_09 is not listed on IDEAS
    15. Martinelli, Cesar, 2001. "Elections with Privately Informed Parties and Voters," Public Choice, Springer, vol. 108(1-2), pages 147-167, July.
    16. Thomas Jensen, 2013. "Elections, Information, and State-Dependent Candidate Quality," Discussion Papers 13-03, University of Copenhagen. Department of Economics.
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    Cited by:

    1. Guido Merzoni & Federico Trombetta, 2016. "The cost of doing the right thing. A model of populism with rent-seeking politicians and the economic crisis," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis1602, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    2. Klumpp, Tilman & Mialon, Hugo & Williams, Michael, 2012. "Matching Funds in Public Campaign Finance," Working Papers 2012-20, University of Alberta, Department of Economics.

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