Political Competition with Campaign Contributions and Informative Advertising

Stephen Coate

No 8693, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper presents a model of political competition with campaign contributions and informative political advertising. Policy-motivated parties compete by selecting candidates and interest groups provide contributions to enhance the electoral prospects of like-minded candidates. Contributions are used to finance advertising campaigns that provide voters with information about candidates' ideologies. The model embodies rational behavior on the part of all actors, is analytically tractable, and has a unique equilibrium. The paper uses the model to analyze the welfare economics of contribution limits. Such limits are shown to redistribute welfare from moderate voters to interest group members. They may or may not raise aggregate welfare.

JEL-codes: D72 (search for similar items in EconPapers)
Date: 2001-12
New Economics Papers: this item is included in nep-cdm and nep-pub
Note: PE
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Citations: View citations in EconPapers (10)

Published as Stephen Coate, 2004. "Political Competition with Campaign Contributions and Informative Advertising," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 772-804, 09.

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