Working Paper: NBER ID: w4877
Authors: Gene Grossman; Elhanan Helpman
Abstract: We study the competition between two political parties for seats in a parliament. The parliament will set two types of policies: ideological and non-ideological. The parties have fixed positions on the ideological issues, but choose their non-ideological platforms to attract voters and campaign contributions. In this context, we ask: How do the equilibrium contributions from special interest groups influence the platforms of the parties? We show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups. The party that is expected to win a majority of seats caters more to the special interests.
Keywords: Electoral Competition; Special Interest Groups; Campaign Contributions
JEL Codes: D72; H70
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Contributions from special interest groups (D72) | Platforms of political parties (D72) |
| Expected electoral success (K16) | Policy platform alignment with special interests (D72) |
| Contributions from special interest groups (D72) | Policy decisions of political parties (D72) |
| Conditional contributions (D64) | Influence on party positions on nonideological issues (D72) |