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Deep Pockets, Extreme Preferences: Interest Groups and Campaign Finance Contributions

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  • Thomas Bassetti
  • Filippo Pavesi

Abstract

In electoral competitions, interest groups will be willing to finance politicians that require funding for campaign advertising, in exchange for policy favors. Our model predicts that interest groups with more extreme preferences will devote more resources to campaign financing. This occurs because lobbies demand policy favors that are costly to candidates since they reduce voter consent. Extreme interest groups must therefore adequately reward politicians by providing higher contributions, so that candidates may recover popularity through campaign advertising. Our unique data set on U.S. House elections provides empirical evidence that is consistent with these findings.

Suggested Citation

  • Thomas Bassetti & Filippo Pavesi, 2012. "Deep Pockets, Extreme Preferences: Interest Groups and Campaign Finance Contributions," Working Papers 222, University of Milano-Bicocca, Department of Economics, revised Apr 2012.
  • Handle: RePEc:mib:wpaper:222
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    References listed on IDEAS

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    More about this item

    Keywords

    Campaign Finance; Interest Groups; Elections; Extreme Preferences;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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