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Even if it's not Bribery: The Case for Campaign Finance Reform

Daley, Brendan and Snowberg, Erik (2011) Even if it's not Bribery: The Case for Campaign Finance Reform. Journal of Law, Economics, and Organization, 27 (2). pp. 324-349. ISSN 8756-6222 .

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We develop a dynamic multidimensional signaling model of campaign finance in which candidates can signal their ability by enacting policy and/or by raising and spending campaign funds, both of which are costly. Our model departs from the existing literature in that candidates do not exchange policy influence for campaign contributions; rather, they must decide how to allocate their efforts between policymaking and fundraising. If high-ability candidates are better policymakers and better fundraisers, then they will raise and spend campaign funds even if voters care only about legislation. Campaign finance reform alleviates this phenomenon and improves voter welfare at the expense of politicians. Thus, we expect successful politicians to oppose true campaign finance reform. We also show that our model is consistent with findings in the empirical and theoretical campaign finance literature.

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Additional Information:© 2009 The Author. Published by Oxford University Press on behalf of Yale University. Advance Access publication June 29, 2009. The authors are indebted to Stephen Ansolabehere, David Austen-Smith, David Baron, Jeremy Bulow, Silvia Console Battilana, Matt Jackson, Keith Krehbiel, Marc Meredith, Gerard Padró i Miquel, Kenneth Shotts, Andrzej Skrzypacz, Eric Zitzewitz, seminar participants at Stanford, and the National Bureau of Economic Research and anonymous referees for useful comments. Brendan Daley acknowledges the support of the Koret Graduate Dissertation Fellowship through a grant to the Stanford Institute for Economic Policy Research. Erik Snowberg acknowledges the financial support of the Stanford Institute for Economic Policy Research Dissertation Fellowship.
Funding AgencyGrant Number
Koret Graduate Dissertation Fellowship UNSPECIFIED
Stanford Institute for Economic Policy ResearchUNSPECIFIED
Issue or Number:2
Classification Code:JEL: D72, D82
Record Number:CaltechAUTHORS:20120530-094252916
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:31702
Deposited By: Tony Diaz
Deposited On:08 Jun 2012 18:57
Last Modified:03 Oct 2019 03:54

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