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Political support for the private system to finance political parties

In a Downsian model of political competition we compare the equilibrium tax and redistribution level obtained from two systems to finance parties' political campaigns: the public and the private system. In the private system ideological voters make campaign contributions to increase the chances of winning of their preferred party. In the public system parties receive funds from the government. If voters are sufficiently ideological the private system induces high aggregate spending. Nevertheless, it may be supported by a majority of voters given the indirect effect contributions have on the equilibrium redistribution level and parties' probability of winning.

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Paper provided by Universitat de les Illes Balears, Departament d'Economía Aplicada in its series DEA Working Papers with number 35.

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Date of creation: 2009
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Handle: RePEc:ubi:deawps:35
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  1. Stephen Coate, 2004. "Pareto-Improving Campaign Finance Policy," American Economic Review, American Economic Association, vol. 94(3), pages 628-655, June.
  2. Christian Schultz & Ignacio Ortuño Ortín, 2000. "Public Funding Of Political Parties," Working Papers. Serie AD 2000-27, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  3. Enriqueta Aragones & Thomas R. Palfrey, 2003. "Spatial Competition Between Two Candidates of Different Quality: The Effects of Candidate Ideology and Private Information," UFAE and IAE Working Papers 573.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  4. Christoph Vanberg, 2004. "Funding Asymmetries in Electoral Competition: How important is a level playing field?," Public Economics 0402002, EconWPA.
  5. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
  6. Gene Grossman & Elhanan Helpman, 1994. "Electoral Competition and Special Interest Politics," NBER Working Papers 4877, National Bureau of Economic Research, Inc.
  7. Stephen Coate, 2001. "Political Competition with Campaign Contributions and Informative Advertising," NBER Working Papers 8693, National Bureau of Economic Research, Inc.
  8. Roemer John E, 2006. "Party Competition under Private and Public Financing: A Comparison of Institutions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-31, April.
  9. Amihai Glazer & Mark Gradstein, 2005. "Elections with contribution-maximizing candidates," Public Choice, Springer, vol. 122(3), pages 467-482, March.
  10. Nicolas Sahuguet & Nicola Persico, 2006. "Campaign spending regulation in a model of redistributive politics," Economic Theory, Springer, vol. 28(1), pages 95-124, 05.
  11. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  12. Christian Schultz, 2007. "Strategic Campaigns and Redistributive Politics," Economic Journal, Royal Economic Society, vol. 117(522), pages 936-963, 07.
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