Electoral Contributions and the Cost of Unpopularity

Thomas Bassetti () and Filippo Pavesi
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Thomas Bassetti: University of Padova

No 05/2015, Working Papers from University of Verona, Department of Economics

Abstract: When considering contributions to electoral campaigns in the U.S., the data reveals that total contributions within industries tend to vary signifcantly over time. To explain this evidence, we present a model in which interest groups finance politicians that require funding for campaign advertising in exchange for policy favors. Our model predicts that interest groups related to industries that experience a rise (decline) in popularity will reduce (increase) the amount of resources devoted to campaign financing. Intuitively, an industry that suffers from a loss of popularity will face greater costs of obtaining policy favors, since it must provide candidates with greater contributions for campaign advertising, in order to compensate for its decline in reputation. The empirical analysis, based on U.S. House elections between 2000 and 2004, strongly supports this finding.

Keywords: Campaign Finance; Interest Groups; Elections; Popularity (search for similar items in EconPapers)
JEL-codes: D72 P16 (search for similar items in EconPapers)
Pages: 46
Date: 2015-02
New Economics Papers: this item is included in nep-pol
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Related works:
Journal Article: ELECTORAL CONTRIBUTIONS AND THE COST OF UNPOPULARITY (2017)
Working Paper: Electoral Contributions and the Cost of Unpopularity (2016)
Working Paper: Electoral Contributions and the Cost of Unpopularity (2015)
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