Lobbying, campaign contributions, and electoral competition

Thanh Le and Erkan Yalcin

European Journal of Political Economy, 2018, vol. 55, issue C, 559-572

Abstract: This paper studies the effect of lobby groups on electoral competition and equilibrium policy outcomes employing a ‘money for policy favours’ model of lobbying. Our results show that when a lobby group seeks to influence an electoral outcome, it will make a financial contribution to only one political party whose policy is closely aligned to its own ideal policy. When misappropriation of campaign funds occurs, political parties that divert more funds for personal gain stand on more independent platforms and require larger contributions from lobby groups. Greater electoral competition could reduce policy distortions but this, in turn, sparks more intense lobbying thereby increasing the scope of misappropriation of funds. In the case of multiple lobbying, political parties either demand different levels of campaign contributions or leave them with different levels of satisfaction.

Keywords: Special interest politics; Lobbying; Political competition; Campaign contributions (search for similar items in EconPapers)
JEL-codes: D72 D82 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:55:y:2018:i:c:p:559-572

DOI: 10.1016/j.ejpoleco.2018.05.003

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