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Party Activists, Campaign Funding, and the Quality of Government

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  • John Maloney
  • Andrew C. Pickering

Abstract

We study the formation of government policy in democracies when turnout depends on party activists and campaign spending--parties' "political capital." The functional importance of political capital determines equilibrium rent- seeking in government. If activists and donors are better than the ordinary voter at distinguishing between good governments and lucky governments, then the more potent political capital is the less the extent of rent-seeking. This situation also rules out finite limits on election spending, though a zero limit could be the optimum if donors and activists are close enough substitutes in the work they do for the party. The one policy that is never optimal is a finite limit on local spending. The Author 2012. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oup.com, Oxford University Press.

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  • John Maloney & Andrew C. Pickering, 2013. "Party Activists, Campaign Funding, and the Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(1), pages 210-238, February.
    • Handle: RePEc:oup:jleorg:v:29:y:2013:i:1:p:210-238
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    File URL: http://hdl.handle.net/10.1093/jleo/ewr030
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    1. Torsten Persson & Guido Tabellini & Francesco Trebbi, 2003. "Electoral Rules and Corruption," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 958-989, June.
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    7. Moon, Woojin, 2006. "The Paradox of Less Effective Incumbent Spending: Theory and Tests," British Journal of Political Science, Cambridge University Press, vol. 36(4), pages 705-721, October.
    8. Moon, Woojin, 2004. "Party Activists, Campaign Resources and Candidate Position Taking: Theory, Tests and Applications," British Journal of Political Science, Cambridge University Press, vol. 34(4), pages 611-633, October.
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    Cited by:

    1. John Maloney & Andrew Pickering, 2013. "Political Competition, Political Donations, Economic Policy and Growth," Discussion Papers 13/21, Department of Economics, University of York.
    2. John Maloney & Andrew Pickering, 2018. "The Economic Consequences of Political Donation Limits," Economica, London School of Economics and Political Science, vol. 85(339), pages 479-517, July.

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    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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