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Political support for the private system to finance political parties

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Abstract

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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    Keywords

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    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 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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