Economic Theory

, Volume 49, Issue 3, pp 591–619 | Cite as

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

Symposium

Abstract

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.

Keywords

Campaign spending Elections Campaign limits Political parties 

JEL Classification

D72 D78 C72 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Aragones E., Palfrey T.R.: Mixed equilibrium in a Downsian model with a favored candidate. J Econ Theory 103, 131–161 (2002)CrossRefGoogle Scholar
  2. Ashworth S., de Mesquita E.B.: Elections with platform and valence competition. Games Econ Behav 67, 191–216 (2009)CrossRefGoogle Scholar
  3. Austen-Smith D.: Redistributing income under proportional representation. J Polit Econ 108(6), 1235–1269 (2000)CrossRefGoogle Scholar
  4. Austen-Smith D., Banks J.S.: Elections, coalitions, and legislative outcomes. Am Polit Sci Rev 82, 405–422 (1988)CrossRefGoogle Scholar
  5. Baron D.P., Diermeier D.: Elections, governments and parliaments in proportional representation systems. Quart J Econ 116, 933–967 (2001)CrossRefGoogle Scholar
  6. Baron, D.P., Diermeier, D., Fong P.: A dynamic theory of parliamentary democracy. Econ Theory (2011, in this issue). doi:10.1007/s00199-011-0605-y
  7. Baye M., Kovenock D., de Vries C.: The solution to the Tullock rent-seeking game when R>2: mixed-strategy equilibria and mean dissipation rates. Public Choice 81, 363–380 (1994)CrossRefGoogle Scholar
  8. Baye M., Kovenock D., de Vries C.: The all-pay auction with complete information. Econ Theory 8, 291–305 (1996)Google Scholar
  9. Bernhardt D., Camara O., Squintani F.: Competence and ideology. Rev Econ Stud 78, 487–522 (2011)CrossRefGoogle Scholar
  10. Besley T., Coate S.: An economic model of representative democracy. Quart J Econ 112(1), 85–114 (1997)CrossRefGoogle Scholar
  11. Callander S.: Political motivations. Rev Econ Stud 75, 671–697 (2008)CrossRefGoogle Scholar
  12. Carrillo J.D., Castanheira M.: Information and strategic political polarization. Econ J 118, 845–874 (2008)CrossRefGoogle Scholar
  13. Coleman J.J., Manna P.F.: Congressional campaign spending and the quality of democracy. J Polit 62, 757–789 (2000)CrossRefGoogle Scholar
  14. d’Aspremont C., Gabszewicz J., Thisse J.: On hotelling’s stability in competition. Econometrica 47(5), 1145–1150 (1979)CrossRefGoogle Scholar
  15. Eyster E., Kittsteiner T.: Party platforms in electoral competition with heterogeneous constituencies. Theor Econ 2, 41–70 (2007)Google Scholar
  16. Feddersen T.: A voting model implying Duverger’s Law and positive turnout. Am J Polit Sci 36, 938–962 (1992)CrossRefGoogle Scholar
  17. Feddersen T., Sened I., Wright S.: Rational voting and candidate entry under plurality rule. Am J Polit Sci 34, 1005–1016 (1990)CrossRefGoogle Scholar
  18. Gerber A.S.: Estimating the effect of campaign spending on Senate election outcomes using instrumental variables. Am Polit Sci Rev 134, 401–411 (1998)CrossRefGoogle Scholar
  19. Gerber A.S., Green D.P.: The effect of non-partisan get-out-to-vote drive: an experimental study of leaftletting. J Polit 62, 846–857 (2000)CrossRefGoogle Scholar
  20. Green D.P., Krasno J.S.: Salvation for the spendthrift incumbent: reestimating the effects of campaign spending in house elections. Am J Polit Sci 32, 884–907 (1988)CrossRefGoogle Scholar
  21. Groseclose T.: A model of candidate location when one candidate has a valence advantage. Am J Polit Sci 45, 862–886 (2001)CrossRefGoogle Scholar
  22. Grossman G.M., Helpman E.: Electoral competition and special interest politics. Rev Econ Stud 63(2), 265–286 (1996)CrossRefGoogle Scholar
  23. Herrera H., Levine D.K., Martinelli C.: Policy platforms, campaign spending and voter participation. J Public Econ 92, 501–513 (2008)CrossRefGoogle Scholar
  24. Hotelling H.: Stability in competition. Econ J 39, 41–57 (1929)CrossRefGoogle Scholar
  25. Iaryczower, M., Mattozzi, A.: On the Nature of Competition in Alternative Electoral Systems. California Institute of Technology, HSS (2009)Google Scholar
  26. Kenny, C., McBurnett, M.: An individual-level multiequation model of expenditure effects in contested house elections. Am Polit Sci Rev 88(3), 699–707 (1994)CrossRefGoogle Scholar
  27. Lizzeri A., Persico N.: The provision of public goods under alternative electoral incentives. Am Econ Rev 91, 225–239 (2001)CrossRefGoogle Scholar
  28. Meirowitz A.: Electoral contests, incumbency advantages and campaign finance. J Polit 27, 681–699 (2008)Google Scholar
  29. Morton, R.B., Myerson, R.B.: Decisiveness of contributors’ perceptions in elections. Econ Theory (2011). doi:10.1007/s00199-011-0605-y
  30. Myerson R.B.: Effectiveness of electoral systems for reducing government corruption: a game-theoretic analysis. Games Econ Behav 5, 118–132 (1993)CrossRefGoogle Scholar
  31. Osborne M.J., Slivinski A.: A model of political competition with citizen-candidates. Quart J Econ 111(1), 65–96 (1996)CrossRefGoogle Scholar
  32. Palfrey T.R.: Spatial equilibrium with entry. Rev Econ Stud 51(1), 139–156 (1984)CrossRefGoogle Scholar
  33. Palfrey T.R.: A mathematical proof of Duverger’s Law. In: Ordeshook, P.C. (eds) Models of Strategic Choice in Politics, pp. 69–91. University of Michigan Press, Ann Arbor (1989)Google Scholar
  34. Perloff J.M., Salop S.C.: Equilibrium with product differentiation. Rev Econ Stud 52(1), 107–120 (1985)CrossRefGoogle Scholar
  35. Persico N., Sahuguet N.: Campaign spending regulation in a model of redistributive politics. Econ Theory 28(1), 95–124 (2006)CrossRefGoogle Scholar
  36. Persson T., Roland G., Tabellini G.: How do Electoral Rules Shape Party Structures, Government Coalitions and Economic Policies. Department of Economics, UC Berkeley (2003)Google Scholar
  37. Persson T., Tabellini G., Trebbi F.: Electoral rules and corruption. J Eur Econ Assoc 1, 958–989 (2006)CrossRefGoogle Scholar
  38. Prat A.: Campaign spending with office-seeking politicians, rational voters, and multiple lobbies. J Econ Theory 103, 162–189 (2002)CrossRefGoogle Scholar
  39. Rekkas M.: The impact of campaign spending on votes in multiparty elections. Rev Econ Stat 89, 573–585 (2007)CrossRefGoogle Scholar
  40. Shaked A., Sutton J.: Relaxing price competition through product differentiation. Rev Econ Stud 49(1), 3–13 (1982)CrossRefGoogle Scholar
  41. Stokes D.E.: Spatial models of party competition. Am Polit Sci Rev 57, 368–377 (1963)CrossRefGoogle Scholar
  42. Stratmann T.: How prices matter in politics: The returns to campaign advertising. Public Choice 140, 357–377 (2009)CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  1. 1.Department of PoliticsPrinceton UniversityPrincetonUSA
  2. 2.MOVE and Universitat Autónoma de BarcelonaBarcelonaSpain

Personalised recommendations