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- Lobby Groups And The Financial Support Of Election Campaigns

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  • M. Socorro Puy

    (Universidad de Málaga)

Abstract

We study a model of competition between two political parties with policy compromise. There is aspecial interest group with well-defined preferences on political issues. Voters are of two kinds:impressionable and knowledgeable. The impressionable voters are influenced by the electioncampaigns. The objective of the parties is to obtain the maximum votes. Parties compete forfinancial support from a given interest group. Each party proposes a plataform in exchange for anamount of campaign funds, and the interest group decides whether to accept or reject each ofcampaign funds, and the interest group decides whether to accept or reject each of theseproposals. We show that parties competition resembles, to a certain extent, Bertrandcompetition. Furthermore, in equilibrium only one party gets funds from interest group. This resultdiffers from the one obtained in a similar model by Grossman and Helpman (1996a) (1996b), inwhich, in equlibrium, both parties are financed by the interest group. This differnce asisesbecause Grossman and Helpman assume that it is the interest group who makes the proposalsto the political parties.

Suggested Citation

  • M. Socorro Puy, 1999. "- Lobby Groups And The Financial Support Of Election Campaigns," Working Papers. Serie AD 1999-18, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:1999-18
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    References listed on IDEAS

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    1. Austen-Smith, David & Banks, Jeffrey, 1988. "Elections, Coalitions, and Legislative Outcomes," American Political Science Review, Cambridge University Press, vol. 82(2), pages 405-422, June.
    2. Langbein, Laura I, 1993. "PACs, Lobbies and Political Conflict: The Case of Gun Control," Public Choice, Springer, vol. 77(3), pages 551-572, November.
    3. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(1), pages 1-31.
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    Cited by:

    1. Francisco Candel-Sánchez & Juan Perote-Peña, 2013. "A political economy model of market intervention," Public Choice, Springer, vol. 157(1), pages 169-181, October.

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