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Public Funding of Political Parties

Author

Listed:
  • Ignacio Ortuno Ortin

    (University of Alicante)

  • Christian Schultz

    (University of Copenhagen)

Abstract

This paper concerns public funding of parties. Two policy motivated parties receive public funds depending on their vote share. Funds finance electoral campaigns influencing voting. Two cases are investigated. In the first some voters are policy motivated and some are ''impressionable'' - their vote depends directly on campaign expenditures. In the second campaigning is informative and all voters are policy motivated. Public funds increases policy convergence in both cases. The effect is larger, the more funding depends on vote shares. When campaigns are informative, there may be multiple equilibria. Intuitively, a large party can stay large since it receives large funds.

Suggested Citation

  • Ignacio Ortuno Ortin & Christian Schultz, 2000. "Public Funding of Political Parties," Econometric Society World Congress 2000 Contributed Papers 0735, Econometric Society.
    • Handle: RePEc:ecm:wc2000:0735
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    References listed on IDEAS

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    Cited by:

    1. Hans Gersbach, 2014. "Campaigns, political mobility, and communication," Public Choice, Springer, vol. 161(1), pages 31-49, October.
    2. Amihai Glazer & Mark Gradstein, 2005. "Elections with contribution-maximizing candidates," Public Choice, Springer, vol. 122(3), pages 467-482, March.
    3. Stephen Coate, 2004. "Political Competition with Campaign Contributions and Informative Advertising," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 772-804, September.
    4. Hans Gersbach, 2014. "Government Debt-Threshold Contracts," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 444-458, January.
    5. Westermark, Andreas, 2004. "Extremism, campaigning and ambiguity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 421-452, May.
    6. Bruno Carvalho, 2021. "Campaign Spending in Local Elections: the Effects of Public Funding," Working Papers ECARES 2021-30, ULB -- Universite Libre de Bruxelles.
    7. Christian Schultz, 2007. "Strategic Campaigns and Redistributive Politics," Economic Journal, Royal Economic Society, vol. 117(522), pages 936-963, July.
    8. Dal Bó, Ernesto, 2007. "Comment," LSE Research Online Documents on Economics 123067, London School of Economics and Political Science, LSE Library.
    9. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July.
    10. Thomas Stratmann, 2003. "Tainted Money? Contribution Limits and the Effectiveness of Campaign Spending," CESifo Working Paper Series 1044, CESifo.
    11. Ignacio Ortuno‐Ortín & Christian Schultz, 2005. "Public Funding of Political Parties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(5), pages 781-791, December.
    12. Westermark, Andreas, 2001. "Campaigning and Ambiguity when Parties Cannot Make Credible Election Promises," Working Paper Series 568, Research Institute of Industrial Economics.
    13. Ossokina, Ioulia V. & Swank, Otto H., 2004. "The optimal degree of polarization," European Journal of Political Economy, Elsevier, vol. 20(1), pages 255-262, March.
    14. Jenny De Freitas, 2011. "Political Support for a Private System of Financing Political Campaigns," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 67(4), pages 352-377, December.
    15. Jenny De Freitas, 2009. "Political support for the private system to finance political parties," DEA Working Papers 35, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    16. Köppl-Turyna, Monika, 2017. "Public funding of parties and political polarization," Working Papers 03, Agenda Austria.
    17. Eric Dunaway & Felix Munoz-Garcia, 2020. "Campaign contributions and policy convergence: asymmetric agents and donations constraints," Public Choice, Springer, vol. 184(3), pages 429-461, September.
    18. Gersbach, Hans & Schneider, Maik T., 2012. "Tax contracts and elections," European Economic Review, Elsevier, vol. 56(7), pages 1461-1479.
    19. Köppl Turyna, Monika, 2015. "How asymmetric funding of parties can lead to political polarization," MPRA Paper 64200, University Library of Munich, Germany.
    20. Troumpounis, Orestis, 2012. "On the distribution of public funding to political parties," Economics Letters, Elsevier, vol. 116(3), pages 367-370.
    21. Thomas Stratmann & Francisco J. & Aparicio-Castillo, 2006. "Competition policy for elections: Do campaign contribution limits matter?," Public Choice, Springer, vol. 127(1), pages 177-206, April.

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