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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.

Suggested Citation

  • Jenny De Freitas, 2009. "Political support for the private system to finance political parties," DEA Working Papers 35, Universitat de les Illes Balears, Departament d'Economía Aplicada.
  • Handle: RePEc:ubi:deawps:35

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    References listed on IDEAS

    1. Nicolas Sahuguet & Nicola Persico, 2006. "Campaign spending regulation in a model of redistributive politics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(1), pages 95-124, May.
    2. Aragones, Enriqueta & Palfrey, Thomas R., 2003. "Spatial Competition Between Two Candidates of Different Quality: The Effects of Candidate Ideology and Private Information," Working Papers 1169, California Institute of Technology, Division of the Humanities and Social Sciences.
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    4. Christian Schultz, 2007. "Strategic Campaigns and Redistributive Politics," Economic Journal, Royal Economic Society, vol. 117(522), pages 936-963, July.
    5. Amihai Glazer & Mark Gradstein, 2005. "Elections with contribution-maximizing candidates," Public Choice, Springer, vol. 122(3), pages 467-482, March.
    6. Ignacio Ortuno-Ortin & Christian Schultz, 2005. "Public Funding of Political Parties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(5), pages 781-791, December.
    7. Christoph Vanberg, 2004. "Funding Asymmetries in Electoral Competition: How important is a level playing field?," Public Economics 0402002, EconWPA.
    8. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 265-286.
    9. 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.
    10. Stephen Coate, 2004. "Political Competition with Campaign Contributions and Informative Advertising," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 772-804, September.
    11. Stephen Coate, 2004. "Pareto-Improving Campaign Finance Policy," American Economic Review, American Economic Association, vol. 94(3), pages 628-655, June.
    12. 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.
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    More about this item


    Political economy; redistribution; campaign finance.;

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • 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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