Debt in Political Campaigns

Alexei Ovtchinnikov and Philip Valta

No 1165, HEC Research Papers Series from HEC Paris

Abstract: Debt is a significant source of funding of political campaigns, with almost half of all campaigns relying on some form of debt. We analyze the incentives created by this type of debt financing. We show that indebted politicians raise more funds in subsequent elections, especially from special interest groups. Consistent with votes-for-money arrangements, indebted politicians vote for the benefit of those interest groups that help funding their reelection campaigns. The findings support the hypothesis that debt creates distortions, as it forces indebted politicians to take policy positions that are not aligned with the local constituents’ interests.

Keywords: Debt financing; Political campaigns; Voting behavior (search for similar items in EconPapers)
JEL-codes: D72 G32 G38 L51 (search for similar items in EconPapers)
Pages: 73 pages
Date: 2018-07-01, Revised 2018-01-30
New Economics Papers: this item is included in nep-cdm and nep-pol
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Debt in Political Campaigns (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1165

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