Working Paper: NBER ID: w8693
Authors: Stephen Coate
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.
Keywords: No keywords provided
JEL Codes: D72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Contribution Limits (D64) | Expected Campaign Spending (K16) |
| Contribution Limits (D64) | Candidate Selection (D79) |
| Contribution Limits (D64) | Welfare Redistribution (I38) |
| Contributions (D64) | Voter Information (K16) |
| Contributions (D64) | Candidate Selection (D79) |