Party Activists, Campaign Funding, and the Quality of Government

John Maloney and Andrew Pickering

The Journal of Law, Economics, and Organization, 2013, vol. 29, issue 1, 210-238

Abstract: We study the formation of government policy in democracies when turnout depends on party activists and campaign spending--parties' "political capital." The functional importance of political capital determines equilibrium rent- seeking in government. If activists and donors are better than the ordinary voter at distinguishing between good governments and lucky governments, then the more potent political capital is the less the extent of rent-seeking. This situation also rules out finite limits on election spending, though a zero limit could be the optimum if donors and activists are close enough substitutes in the work they do for the party. The one policy that is never optimal is a finite limit on local spending. The Author 2012. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oup.com, Oxford University Press.

Date: 2013
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Working Paper: Party Activists, Campaign Funding and the Quality of Government (2010)
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