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Political Equilibrium with Private or/and Public Campaign Finance: A Comparison of Institutions


  • John E. Roemer

    () (Yale University)


We propose a theory of party competition (two parties, single-issue) where citizens acquire party membership by contributing money to a party, and where a member's influence on the policy taken by her party is proportional to her campaign contribution. The polity consists of informed and uninformed voters: Only informed voters join parties, and the party campaign chest, the sum of its received contributions, is used to advertise and reach uninformed voters. Parties compete with each other strategically with respect to policy choice and advertising. We propose a definition of political equilibrium, in which party membership, citizen contributions, and parties' policies are simultaneously determined, for each of four financing institutions, running a gamut between a purely private, unconstrained system, to a public system in which all citizens have equal financial input. We compare the representation and welfare properties of these four institutions.

Suggested Citation

  • John E. Roemer, 2004. "Political Equilibrium with Private or/and Public Campaign Finance: A Comparison of Institutions," Yale School of Management Working Papers ysm349, Yale School of Management.
  • Handle: RePEc:ysm:somwrk:ysm349

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    Cited by:

    1. Christoph Vanberg, 2005. ""One Man, One Dollar"? Examining the equalization argument in support of campaign contribution limits," Papers on Strategic Interaction 2005-31, Max Planck Institute of Economics, Strategic Interaction Group.
    2. Benjamin Bishin & Jay Dow & James Adams, 2006. "Does democracy “suffer” from diversity? Issue representation and diversity in senate elections," Public Choice, Springer, vol. 129(1), pages 201-215, October.

    More about this item


    Political Equilibrium; Campaign Finance; Representation;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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