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An economic analysis of campaign finance

Prat, Andrea (2000) An economic analysis of campaign finance. World Economics, 1 (2). pp. 13-27. ISSN 1468-1838

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Electoral campaign finance is an important, and much debated, phenomenon in democracies throughout the world. This article discusses a possible economic model of campaign finance, which could be used for policy evaluation. At the core of the model lies an asymmetry of information between lobbies and voters. Lobbies know more than voters about the quality of candidates. Campaign contributions constitute an indirect way to reveal lobbies’ information to voters. However, this informational benefit comes at the cost of candidates deviating from the median voter’s preferred policy in order to attract higher contributions.

Item Type: Article
Official URL:
Additional Information: © 2000 NTC Publications Ltd
Divisions: Economics
Subjects: H Social Sciences > HG Finance
Sets: Collections > Economists Online
Departments > Economics
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Date Deposited: 02 Jun 2008 14:23
Last Modified: 08 Sep 2021 23:09

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