TY  - JOUR
AU  - Coate,Stephen
TI  - Political Competition with Campaign Contributions and Informative Advertising
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8693
PY  - 2001
Y2  - December 2001
UR  - http://www.nber.org/papers/w8693
L1  - http://www.nber.org/papers/w8693.pdf
N1  - Author contact info:
Stephen Coate
Department of Economics
Cornell University
Uris Hall
Ithaca, NY 14853-7601
Tel: 607/255-1912
Fax: 215/573-2057
E-Mail: sc163@cornell.edu
AB  - 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.
ER  -