, Volume 49, Issue 3, pp 591-619
Date: 30 Mar 2011

The pro-competitive effect of campaign limits in non-majoritarian elections

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We study a model of elections in non-majoritarian systems that captures the link between competition in policies and competition in campaign spending. We argue that the overall competitiveness of the political arena depends on both the endogenous number of parties contesting the election and the endogenous level of campaign spending. These two dimensions are linked together through their combined effect on the total equilibrium level of political rents. We illustrate the key insights of the model with an analysis of the competitive effects of campaign spending limits. We show that under some conditions spending caps can be pro-competitive, leading to an increase in the number of parties contesting the elections.

We would like to thank the editor and an anonymous referee for helpful comments. Mattozzi acknowledges financial support from the National Science Foundation, SES-0617901, and the support of the Barcelona GSE and of the Government of Catalonia.