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Caps on Political Contributions, Monetary Penalties and Politician Preferences

Author

Listed:
  • Ivan Pastine

    (University College Dublin)

  • Tuvana Pastine

    (National University of Ireland, Maynooth)

Abstract

With politician preferences over policy outcomes, the effect of a contribution cap with monetary penalties for exceeding the cap is starkly different from the case with an indifferent politician. In contrast to Kaplan and Wettstein (AER, 2006) and Gale and Che (AER, 2006), a cap is never neutral on the expected cost of contributions nor on the policy outcome. Furthermore more restrictive caps can lead to increased aggregate contributions. When the penalty for exceeding the cap is small enough that it is impossible to suppress all contributions, the influence of money on policy is minimized with a binding but non-zero cap and maximized with no cap.

Suggested Citation

  • Ivan Pastine & Tuvana Pastine, 2009. "Caps on Political Contributions, Monetary Penalties and Politician Preferences," Working Papers 200912, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:200912
    as

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    File URL: http://www.ucd.ie/t4cms/wp09.12.pdf
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    References listed on IDEAS

    as
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    2. Ivan Pastine & Tuvana Pastine, 2010. "Politician preferences, law-abiding lobbyists and caps on political contributions," Public Choice, Springer, vol. 145(1), pages 81-101, October.
    3. Stephen Ansolabehere & John M. de Figueiredo & James M. Snyder Jr, 2003. "Why is There so Little Money in U.S. Politics?," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 105-130, Winter.
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    Keywords

    All-pay auction; campaign finance reform; soft money; explicit ceiling; BCRA.;
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