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Political Competition, Political Donations, Economic Policy and Growth

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  • John Maloney
  • Andrew Pickering

Abstract

Greater political competition reduces the extent of rent-seeking or resource diversion by politicians in government. However, the potency of this effect depends on whether or not there are limits on donations to candidates standing for election, and on the objectives of donors themselves. Data from the US states suggest that the corruption-political competition gradient is stronger under laissez-faire regimes. Consistent with our notion of 'weakly benign' donors, limits are associated with better policies and stronger growth performance at low levels of political competition, whilst laissez-faire is preferred when political competition is high.

Suggested Citation

  • John Maloney & Andrew Pickering, 2013. "Political Competition, Political Donations, Economic Policy and Growth," Discussion Papers 13/21, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:13/21
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    References listed on IDEAS

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    More about this item

    Keywords

    political competition; political donations; rent-seeking; economic policy; growth;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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