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Electoral Contributions and the Cost of Unpopularity

Author

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  • Thomas Bassetti

    (University of Padova)

  • Filippo Pavesi

    (Department of Economics (University of Verona))

Abstract

When considering electoral campaigns, those candidates that receive contributions from relatively unpopular industries should be regarded less favorably by voters that have information on the sources of funding. To offset this unpopularity effect, politicians may either demand more money for campaign advertising from these industries in order to persuade less informed voters, or shy away from unpopular contributors to avoid losing the support of the informed. Our model predicts that the first effect dominates, and that interest groups related to industries that experience a rise (decline) in unpopularity will increase (decrease) the amount of resources devoted to campaign financing. By using a set of alternative identification strategies to assess the impact of unpopularity on contributions for U.S. House elections, we provide robust evidence in favor of our predictions.

Suggested Citation

  • Thomas Bassetti & Filippo Pavesi, 2016. "Electoral Contributions and the Cost of Unpopularity," Working Papers 12/2016, University of Verona, Department of Economics.
    • Handle: RePEc:ver:wpaper:12/2016
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    JEL classification:

    • 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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