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Political Support for a Private System of Financing Political Campaigns

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In a context where parties announce an income tax and spend contributions received in campaign advertising, we compare two methods of financing political campaigns: the public and the private system. Under the public system, parties receive public funds in proportion to their voting share. Under the private system, voters contribute to political campaigns to increase a party's probability of winning. Competition for contributions may induce excessive campaign spending under the private system. Still, it may be supported by a majority of voters, given the indirect effect contributions have on the equilibrium tax and a party's probability of winning.
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Keywords: CAMPAIGN FINANCE; POLITICAL ECONOMY; REDISTRIBUTION

Document Type: Research Article

Publication date: 2011-12-01

More about this publication?
  • As one of the world's oldest professional journals in public finance, founded in 1884, FinanzArchiv (FA) publishes original work from all fields of public economics which are of interest to an international readership, e.g. taxation, public debt, public goods, public choice, federalism, market failure, social policy, and the welfare state. Special emphasis is on high-quality theoretical and empirical papers on current policy issues.

    FA is a peer-reviewed journal commited to a prompt turnaround of submissions.

    FA is listed in the Social Science Citation Index (SSCI), in Current Contents/Social and Behavioral Sciences, in Econ Lit, in the Journal of Economic Literature, in IDEAS and RePEc and in the International Bibliography of the Social Sciences.

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