Schultz, Christian: Public Funding of Political Parties
World Conference Econometric Society, 2000, Seattle

Ignacio Ortuno Ortin, University of Alicante
Christian Schultz, University of Copenhagen
Public Funding of Political Parties
Session: C-8-12  Monday 14 August 2000  by Schultz, Christian
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.
Submitted paper full-text in .pdf

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