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Matching Funds in Public Campaign Finance

Author

Listed:
  • Klumpp, Tilman

    () (University of Alberta, Department of Economics)

  • Mialon, Hugo

    () (Emory University)

  • Williams, Michael

    () (Competition Economics)

Abstract

Matching provisions in state clean elections acts have been ruled unconstitutional by the U.S. Supreme Court on First Amendment grounds (Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, 2011). By modeling political speech as a costly advertising activity in an electoral contest, we show that matching funds can indeed decrease speech by privately funded candidates. Moreover, the state can undo any restrictions on matching programs imposed by courts, and replicate the equilibria under a matching program, by adopting an appropriately chosen lumpsum funding scheme. We also evaluate the validity of two specific arguments made by the Supreme Court in its Arizona decision, finding that one is incorrect and one is correct within the context of our model. Lastly, we provide preliminary evidence that the Arizona ruling has in fact increased private spending and increased the number of candidates per election race.

Suggested Citation

  • Klumpp, Tilman & Mialon, Hugo & Williams, Michael, 2012. "Matching Funds in Public Campaign Finance," Working Papers 2012-20, University of Alberta, Department of Economics.
  • Handle: RePEc:ris:albaec:2012_020
    as

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    File URL: https://sites.ualberta.ca/~econwps/2012/wp2012-20.pdf
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    References listed on IDEAS

    as
    1. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
    2. Prat, Andrea & Puglisi, Riccardo & Snyder, James M., 2010. "Is Private Campaign Finance a Good Thing? Estimates of the Potential Informational Benefits," Quarterly Journal of Political Science, now publishers, vol. 5(3), pages 291-318, December.
    3. Tilman Klumpp, 2011. "Populism, Partisanship, and the Funding of Political Campaigns," Emory Economics 1107, Department of Economics, Emory University (Atlanta).
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    public campaign finance; matching funds; trigger funds; clean elections;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • K19 - Law and Economics - - Basic Areas of Law - - - Other

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