Ideology, Asymmetric Information, and Campaign Contributions to Politicians

John Boyce

No 165, Working Papers from Department of Economics, The University of Auckland

Abstract: This paper considers a model of interest group competition to influence policy outcomes when politicians and some interest groups hold private information about the polic y preferences (ideology) of politicians. Politicians cannot credibly reveal their ideology to others because all politician types prefer more campaign contributions to fewer. However, informed interest groups do convey some information about politician_s type by their contributions. If an uninformed group is a friend (it prefers moving the given policy in the same direction as the informed group), the informed group will truthfully reveal whether or not the politician is receptive to contributions. However, if the uninformed group is an enemy (it prefers a policy movement in the opposite direction), with the same signal the informed group only partially reveals whether the politician is receptive to contributions from its enemies. Empirical evidence is presented that supports the hypothesis that political action committee contributions are informative as well as persuasive.

Keywords: Economics (search for similar items in EconPapers)
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:auc:wpaper:165

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