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The Iceberg Theory of Campaign Contributions: Political Threats and Interest Group Behavior

Author

Listed:
  • Marcos Chamon
  • Ethan Kaplan

Abstract

We present a model where special interest groups condition contributions on the receiving candidate's support and also her opponent's. This allows interest groups to obtain support from contributions as well as from threats of contributing. Out-of-equilibrium contributions help explain the missing money puzzle. Our framework contradicts standard models in predicting that interest groups give to only one side of a race. We also predict that special interest groups will mainly target lopsided winners, whereas general interest groups will contribute mainly to candidates in close races. We verify these predictions in FEC data for US House elections from 1984-1990. (JEL D72)

Suggested Citation

  • Marcos Chamon & Ethan Kaplan, 2013. "The Iceberg Theory of Campaign Contributions: Political Threats and Interest Group Behavior," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 1-31, February.
    • Handle: RePEc:aea:aejpol:v:5:y:2013:i:1:p:1-31
    Note: DOI: 10.1257/pol.5.1.1
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    Citations

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    Cited by:

    1. Campante, Filipe R., 2011. "Redistribution in a model of voting and campaign contributions," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 646-656, August.
    2. Adam Fremeth & Brian Kelleher Richter & Brandon Schaufele, 2018. "Spillovers from regulating corporate campaign contributions," Journal of Regulatory Economics, Springer, vol. 54(3), pages 244-265, December.
    3. Bruno Carvalho, 2021. "Campaign Spending in Local Elections: the Effects of Public Funding," Working Papers ECARES 2021-30, ULB -- Universite Libre de Bruxelles.
    4. Cooper, Zack & Kowalski, Amanda & Powell, Eleanor Neff & Wu, Jennifer D., 2024. "Politics and health care spending in the United States: A case study from the passage of the 2003 Medicare Modernization Act," Journal of Health Economics, Elsevier, vol. 95(C).
    5. Ryan Rafaty & Geoffroy Dolphin & Felix Pretis, 2020. "Carbon pricing and the elasticity of CO2 emissions," Working Papers EPRG2035, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    6. William R. Kerr & William F. Lincoln & Prachi Mishra, 2014. "The Dynamics of Firm Lobbying," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 343-379, November.
    7. Laurent Bouton & Julia Cagé & Edgard Dewitte & Vincent Pons, 2021. "Small Campaign Donors," SciencePo Working papers Main hal-03878175, HAL.
    8. Julia Cagé & Malka Guillot, 2021. "Is Charitable Giving Political? Evidence from Wealth and Income Tax Returns," SciencePo Working papers Main hal-03877993, HAL.
    9. repec:spo:wpmain:info:hdl:2441/7rcgbs4v788terphdvb6a5e8t8 is not listed on IDEAS
    10. Laurent Bouton & Micael Castanheira & Allan Drazen, 2024. "A Theory of Small Campaign Contributions," The Economic Journal, Royal Economic Society, vol. 134(662), pages 2351-2390.
    11. Thomas Bassetti & Filippo Pavesi, 2012. "Deep Pockets, Extreme Preferences: Interest Groups and Campaign Finance Contributions," Working Papers 222, University of Milano-Bicocca, Department of Economics, revised Apr 2012.
    12. repec:hal:spmain:info:hdl:2441/7rcgbs4v788terphdvb6a5e8t8 is not listed on IDEAS
    13. Srivastav, Sugandha & Rafaty, Ryan, 2021. "Five Worlds of Political Strategy in the Climate Movement," INET Oxford Working Papers 2021-07, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    14. Hillman, Arye L. & Long, Ngo V., 2018. "Policies and prizes," European Journal of Political Economy, Elsevier, vol. 54(C), pages 99-109.
    15. Yasmine Bekkouche & Julia Cage, 2018. "The Price of a Vote: Evidence from France, 1993-2014," Working Papers Series 68, Institute for New Economic Thinking.
    16. Hideo Konishi & Chen-Yu Pan, 2020. "Silent promotion of agendas: campaign contributions and ideological polarization," Public Choice, Springer, vol. 182(1), pages 93-117, January.
    17. Thomas Bassetti & Filippo Pavesi, 2017. "Electoral Contributions And The Cost Of Unpopularity," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1771-1791, October.
    18. Cagé, Julia & Bekkouche, Yasmine, 2018. "The Heterogeneous Price of a Vote: Evidence from France, 1993-2014," CEPR Discussion Papers 12614, C.E.P.R. Discussion Papers.
    19. Petrova, Maria & Yildirim, Pinar & Sen, Ananya, 2017. "Social Media and Political Donations: New Technology and Incumbency Advantage in the United States," CEPR Discussion Papers 11808, C.E.P.R. Discussion Papers.
    20. Thanh Le & Erkan Yalcin, 2023. "Lobbying, political competition and the welfare effect of campaign contribution tax," Scottish Journal of Political Economy, Scottish Economic Society, vol. 70(2), pages 158-179, May.
    21. Julia Cage & Yasmine Bekkouche, 2018. "The Price of a Vote: Evidence from France, 1993-2014," SciencePo Working papers Main hal-03393149, HAL.
    22. Sugandha Srivastav & Ryan Rafaty, 2023. "Political Strategies to Overcome Climate Policy Obstructionism," Papers 2304.14960, arXiv.org.
    23. Yan-Leung Cheung & P. Raghavendra Rau & Aris Stouraitis, 2021. "What Determines the Return to Bribery? Evidence from Corruption Cases Worldwide," Management Science, INFORMS, vol. 67(10), pages 6235-6265, October.
    24. Mireya Bermeo Álvarez, 2013. "La economía política del tamano del Estado," Revista CIFE, Universidad Santo Tomás, June.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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    1. The Iceberg Theory of Campaign Contributions: Political Threats and Interest Group Behavior (American Economic Journal: Economic Policy 2013) in ReplicationWiki

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