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Public funding of political parties when campaigns are informative Abstract: The paper considers public funding of political parties when some voters are poorly informed about parties? candidates and campaigns are informative. For symmetric equilibria, it is shown that more public funding leads parties to chose more moderate candidates, and that an increase in the funding's dependence on vote shares induces further moderation and improves welfare. If parties are asymmetric, vote share dependent public funding bene?ts the large party and makes it moderate its candidate, while the smaller party reacts by choosing a more extremist candidate. On balance, however, if the parties are not too asymmetric, an increase in vote share dependent funding improves welfare and increases the likelihood that a moderate candidate wins the election

  • Ignacio Ortuño Ortín

    (Department of Economics, University Carlos III)

  • Christian Schultz

    (Department of Economics, University og Copenhagen)

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    No abstract is available for this item.

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    File URL: http://www.econ.ku.dk/eprn_epru/Workings_Papers/WP-12-05.pdf
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    Paper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 2012-05.

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    Length: 31 pages
    Date of creation: Jun 2012
    Date of revision:
    Handle: RePEc:kud:epruwp:12-05
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    1. Christian Schultz, 2003. "Strategic Campaigns and Redistributive Politics," EPRU Working Paper Series 03-03, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    2. Andrea Galeotti & Andrea Mattozzi, 2011. ""Personal Influence": Social Context and Political Competition," American Economic Journal: Microeconomics, American Economic Association, vol. 3(1), pages 307-27, February.
    3. Potters, J.J.M. & Sloof, R. & van Winden, F.A.A.M., 1997. "Campaign expenditures, contributions and direct endorsements. The strategic use of information and money to influence voter behaviour," Other publications TiSEM 347b9f99-149a-4ab3-966f-f, School of Economics and Management.
    4. Troumpounis, Orestis, 2012. "On the distribution of public funding to political parties," Economics Letters, Elsevier, vol. 116(3), pages 367-370.
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