Government Antismoking Campaigns: An Endogenous Yardstick Political Competition Approach

This paper develops an endogenous yardstick competition approach to examine the effects of government anti-smoking campaigns. It finds that government anti-smoking campaigns can benefit the government in political bargaining with the tobacco industry by reducing the tobacco lobby's alternative welfare. Anti-smoking campaigns not only push up the equilibrium taxation on tobacco but also force the tobacco lobby to increase its political contributions because the bargaining position of the industry becomes weaker. The paper also finds that when the effectiveness of campaign spending on the expected vote share increases, the incumbent government / politicians will increase their effort in anti-smoking campaigns, and as a result, extract more political contributions.