Populism, Partisanship, and the Funding of Political Campaigns

Tilman Klumpp ()

Emory Economics from Department of Economics, Emory University (Atlanta)

Abstract: We de ne populism as a politician's eort to appeal to a large group of voters with limited information regarding a policy-relevant state of nature. In our model, the populist motive makes it impossible for political candidates to communicate their information to voters credibly. We show that the presence of special interest groups (SIGs) with partisan preferences can mitigate this eect and thereby improve policy. This does not happen because SIGs are better informed than policy makers. Instead, campaign contributions by SIGs allow politicians to insulate themselves from the need to adopt populist platforms. We show that a regime in which SIGs are allowed to contribute to political campaigns welfare-dominates (ex ante) regimes in which no such contributions are allowed, or where campaigns are publicly nanced, or where they are funded by the candidates' private wealth.

New Economics Papers: this item is included in nep-cdm, nep-cta and nep-pol
Date: 2011-04
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Persistent link: http://EconPapers.repec.org/RePEc:emo:wp2003:1107

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