Working Paper: NBER ID: w8371
Authors: James E. Anderson; Thomas J. Prusa
Abstract: Many political markets are essentially uncontested, in the sense that one candidate raises little (or no) money and consequently has little chance of election. This presents a puzzle in the presence of apparently low barriers to entry. Using a variant of Baron (1989) we provide a theory encompassing both contested and uncontested markets. The essential addition is the presence of fixed costs of campaigning. We show that these may be quite small and yet constitute decisive barriers to entry.
Keywords: Political Economy; Campaign Contributions; Political Competition
JEL Codes: D72; H70
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| fixed costs of campaigning (D79) | likelihood of candidate entry (D79) |
| inability to raise funds (G33) | candidate entry (L26) |
| fundraising dynamics (D64) | future contributions (D64) |
| lack of funding (I22) | lack of competitiveness (L49) |
| lack of competitiveness (L49) | candidate's chances of success (D79) |
| structural dynamics of political contributions (D72) | uncontested races (K16) |