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Campaign spending with office-seeking politicians, rational voters, and multiple lobbies

Prat, Andrea (1998) Campaign spending with office-seeking politicians, rational voters, and multiple lobbies. 123. Center for Economic Research, Tilburg University, Tilburg, The Netherlands.

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Abstract

I introduce a microfounded model of campaign ¯nance with o±ce-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 ¯nance their electoral expenditures. Voters are not fooled by electoral expenditures: they are in°uenced 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 ¯nding that campaign expenditures have a very low e®ect 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.

Item Type: Monograph (Discussion Paper)
Official URL: http://center.uvt.nl
Additional Information: © 1998 the author
Library of Congress subject classification: J Political Science > JA Political science (General)
Journal of Economic Literature Classification System: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
M - Business Administration and Business Economics; Marketing; Accounting > M3 - Marketing and Advertising > M37 - Advertising
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information
Sets: Collections > Economists Online
Departments > Economics
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 123
Date Deposited: 02 Jun 2008 10:26
URL: http://eprints.lse.ac.uk/5224/

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