Party Activists, Campaign Funding and the Quality of Government

John Maloney and Andrew Pickering

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

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. Often the more potent political capital is the greater the extent of rent-seeking. Limiting the level of political capital is distinct from reducing its potency, and whereas we find a strong case for reducing potency we find that placing limits on campaign spending are rarely optimal, and in particular that weak limits are never optimal. A limit on total campaign spending can increase government quality under certain conditions and if so then strong limits are always better than weak limits. However, finite limits on either national or local campaign spending alone, as often seen in practice, are never optimal.

Keywords: Party activists; campaign funding; rent-seeking; political finance (search for similar items in EconPapers)
JEL-codes: D72 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2010-12
New Economics Papers: this item is included in nep-pol
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Journal Article: Party Activists, Campaign Funding, and the Quality of Government (2013)
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