 Do Campaign Finance Policies Really Improve Voters' Welfare?Filippo Gregorini () and Filippo Pavesi No 209, Working Papers from University of Milano-Bicocca, Department of Economics Abstract: In an electoral race, interest groups will be willing to finance political candidates’ campaigns in return for favors that are costly to voters. Starting from the empirical observation of split contributions, we develop a theoretical model of directly informative campaign advertising with rational voters. In this setting, interest groups that demand more favors are less likely to finance candidates to enhance their electoral prospects. We find that the only feasible Pareto improving policy involves providing specific limits and subsidies to each candidate. Unfortunately, this policy is very demanding in terms of information for the policy maker and always involves candidates providing favors to interest groups. We argue that bans on contributions without public subsidies may not be welfare improving, since they negatively affect the informational value of advertisements. Keywords: Campaign Finance; Interest Groups; Elections; Welfare (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:mib:wpaper:209 Access Statistics for this paper More papers in Working Papers from University of Milano-Bicocca, Department of Economics Contact information at EDIRC. |
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