Campaign Spending with Office-Seeking Politicians, Rational Voters and Multiple Lobbies

A. Prat

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Abstract

I introduce a microfounded model of campaign finance with office-seeking politicians, a continuum of voters, and a large number of heterogeneous lobbies. Lobbies make contributions to politicians according to a common agency framework. Politicians use contributions to finance their electoral expenditures. Voters are not fooled by electoral expenditures: they are influenced in a way that is consistent with the equilibrium behavior of lobbies and politicians. The model is used to: (i) determine the relation between campaign spending and political deadweight; (ii) show the informational value of lobbies' contributions; (iii) evaluate the welfare implications of restricting campaign spending; and (iv) interpret the empirical finding that campaign expenditures have a very low effect on election outcome. One can say that this model makes the best case in favor of campaign contributions. Nevertheless, under reasonable parameter values, a ban on campaign contributions is welfare-improving.
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages31
Volume1998-123
Publication statusPublished - 1998

Publication series

NameCentER Discussion Paper
Volume1998-123

Fingerprint

Lobbies
Politicians
Campaign spending
Voters
Expenditure
Campaign contributions
Finance
Elections
Campaign finance
Common agency
Welfare implications

Keywords

  • costs
  • lobbying
  • elections
  • voting

Cite this

Prat, A. (1998). Campaign Spending with Office-Seeking Politicians, Rational Voters and Multiple Lobbies. (CentER Discussion Paper; Vol. 1998-123). Tilburg: Microeconomics.
Prat, A. / Campaign Spending with Office-Seeking Politicians, Rational Voters and Multiple Lobbies. Tilburg : Microeconomics, 1998. (CentER Discussion Paper).
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Prat, A 1998 'Campaign Spending with Office-Seeking Politicians, Rational Voters and Multiple Lobbies' CentER Discussion Paper, vol. 1998-123, Microeconomics, Tilburg.

Campaign Spending with Office-Seeking Politicians, Rational Voters and Multiple Lobbies. / Prat, A.

Tilburg : Microeconomics, 1998. (CentER Discussion Paper; Vol. 1998-123).

Research output: Working paperDiscussion paperOther research output

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AB - I introduce a microfounded model of campaign finance with office-seeking politicians, a continuum of voters, and a large number of heterogeneous lobbies. Lobbies make contributions to politicians according to a common agency framework. Politicians use contributions to finance their electoral expenditures. Voters are not fooled by electoral expenditures: they are influenced in a way that is consistent with the equilibrium behavior of lobbies and politicians. The model is used to: (i) determine the relation between campaign spending and political deadweight; (ii) show the informational value of lobbies' contributions; (iii) evaluate the welfare implications of restricting campaign spending; and (iv) interpret the empirical finding that campaign expenditures have a very low effect on election outcome. One can say that this model makes the best case in favor of campaign contributions. Nevertheless, under reasonable parameter values, a ban on campaign contributions is welfare-improving.

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Prat A. Campaign Spending with Office-Seeking Politicians, Rational Voters and Multiple Lobbies. Tilburg: Microeconomics. 1998. (CentER Discussion Paper).