Do Campaign Finance Policies Really Improve Voters' Welfare?
In an electoral race, interest groups will be willing to finance political candidates’ campaigns in return for favors that are costly to voters. Starting from the empirical observation of split contributions, we develop a theoretical model of directly informative campaign advertising with rational voters. In this setting, interest groups that demand more favors are less likely to finance candidates to enhance their electoral prospects. We find that the only feasible Pareto improving policy involves providing specific limits and subsidies to each candidate. Unfortunately, this policy is very demanding in terms of information for the policy maker and always involves candidates providing favors to interest groups. We argue that bans on contributions without public subsidies may not be welfare improving, since they negatively affect the informational value of advertisements.
|Date of creation:||Apr 2011|
|Date of revision:||Apr 2011|
|Contact details of provider:|| Postal: Piazza Ateneo Nuovo, 1 Milano 20126|
Phone: +39 02 6448 3089
Fax: +39 02 6448 3085
Web page: http://dems.unimib.it
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Kreps & Robert Wilson, 1998.
Levine's Working Paper Archive
237, David K. Levine.
- Prat, A., 1998.
"Campaign Spending with Office-Seeking Politicians, Rational Voters and Multiple Lobbies,"
1998-123, Tilburg University, Center for Economic Research.
- 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.
- Aragones, Enriqueta & Palfrey, Thomas. R., 2000.
"Mixed Equilibrium in a Downsian Model With a Favored Candidate,"
1102, California Institute of Technology, Division of the Humanities and Social Sciences.
- Aragones, Enriqueta & Palfrey, Thomas R., 2002. "Mixed Equilibrium in a Downsian Model with a Favored Candidate," Journal of Economic Theory, Elsevier, vol. 103(1), pages 131-161, March.
- Enriqueta Aragonés & Thomas R. Palfrey, 2000. "Mixed equilibrium in a Downsian model with a favored candidate," Economics Working Papers 502, Department of Economics and Business, Universitat Pompeu Fabra.
- Christian Schultz, 2007.
"Strategic Campaigns and Redistributive Politics,"
Royal Economic Society, vol. 117(522), pages 936-963, 07.
- Christian Schultz, 2003. "Strategic Campaigns and Redistributive Politics," CESifo Working Paper Series 858, CESifo Group Munich.
- 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.
- Andrea Prat, 2002.
"Campaign Advertising and Voter Welfare,"
Review of Economic Studies,
Oxford University Press, vol. 69(4), pages 999-1017.
- Thomas Stratmann, 2009. "How prices matter in politics: the returns to campaign advertising," Public Choice, Springer, vol. 140(3), pages 357-377, September.
When requesting a correction, please mention this item's handle: RePEc:mib:wpaper:209. 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: (Matteo Pelagatti)
If references are entirely missing, you can add them using this form.