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A Theory of Small Campaign Contributions

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  • Laurent Bouton
  • Micael Castanheira
  • Allan Drazen

Abstract

We propose a theory of small campaign contributions driven by an electoral motive, i.e., the desire to influence election outcomes. Though small donors take as given the actions of others, strategic interactions induce patterns consistent with empirical findings, e.g., election closeness and underdog effects. We also study different forms of campaign finance laws, and show why caps should be combined with a progressive tax on contributions. Next, we introduce large donors and show that several conclusions in the literature may be significantly modified by the interaction with small donors. Throughout, we discuss the empirical implications of our findings.

Suggested Citation

  • Laurent Bouton & Micael Castanheira & Allan Drazen, 2018. "A Theory of Small Campaign Contributions," NBER Working Papers 24413, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24413
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    Cited by:

    1. Bernhardt, Dan & Ghosh, Meenakshi, 2020. "Positive and negative campaigning in primary and general elections," Games and Economic Behavior, Elsevier, vol. 119(C), pages 98-104.
    2. Denter, Philipp, 2020. "Campaign contests," European Economic Review, Elsevier, vol. 127(C).
    3. Micael Castanheira De Moura & Steffen Huck & Johannes Leutgeb, 2020. "How Trump Triumphed :Multi-candidate Primaries with Buffoons," Working Papers ECARES 2020-45, ULB -- Universite Libre de Bruxelles.
    4. Bekkouche, Yasmine & Cagé, Julia & Dewitte, Edgard, 2020. "The Heterogeneous Price of a Vote: Evidence from Multiparty Systems, 1993-2017," CEPR Discussion Papers 15150, C.E.P.R. Discussion Papers.
    5. Yasmine Bekkouche & Julia Cage, 2019. "The Heterogeneous Price of a Vote: Evidence from France, 1993-2014," Sciences Po Economics Discussion Papers 2019-09, Sciences Po Departement of Economics.
    6. Maria Petrova & Ricardo Perez-Truglia & Andrei Simonov & Pinar Yildirim, 2020. "Are Political and Charitable Giving Substitutes? Evidence from the United States," NBER Working Papers 26616, National Bureau of Economic Research, Inc.
    7. Avidit Acharya & Edoardo Grillo & Takuo Sugaya & Eray Turkel, 2019. "Dynamic Campaign Spending," Carlo Alberto Notebooks 601, Collegio Carlo Alberto.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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