Should we tax or cap political contributions? A lobbying model with policy favors and accessJournal of Public Economics, 2009, vol. 93, issue 7-8, pages 831-842 Abstract: This paper develops a model of political contributions in which a politician can either sell policy favors, or sell access. Access allows interest groups to share hard information with the politician in support of their preferred policy. Here selling access maximizes policy utility, while selling policy favors maximizes total contributions. Imposing a binding contribution limit makes it more likely that the politician sells access, which can improve expected constituent welfare. However, a contribution limit distorts the signals associated with the contributions, which tends to result in worse policy. Alternatively, a tax on political contributions can ensure that the politician sells access without distorting his information. Therefore, from the viewpoint of a representative constituent, a tax on contributions is strictly preferred to a contribution limit or no reform. The politician, however, may prefer regulation in the form of a contribution limit, even when a tax is better for the constituent. Keywords: Lobbying; Campaign; finance; reform; Political; access; Bid; caps; Verifiable; information; Evidence; disclosure; All-pay; auctions (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:eee:pubeco:v:93:y:2009:i:7-8:p:831-842 Access Statistics for this article Journal of Public Economics is edited by R. Boadway and J. Poterba More articles in Journal of Public Economics from Elsevier |
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