A Simple Model of Political Contributions
- 1 April 1981
- journal article
- research article
- Published by SAGE Publications in Public Finance Quarterly
- Vol. 9 (2), 143-157
- https://doi.org/10.1177/109114218100900202
Abstract
A microeconomic model of supply and demand for political contributions is developed. The supply is derived from the behavior of firms which want to maximize the expected gain from supporting political candidates in an election campaign. These firms allocate funds to opposing candidates, and equate the expected marginal return of a dollar contributed to each candidate. The maximizing conditions lead to a comparative statistics analysis. The demand for contributions is derived by positing that political candidates derive utility from their prospects of being elected and from some favored political stance. The latter may be traded for contributions, which enhance the candidate's election probability. The implications of this simple theory are tested using the 1972 congressional elections results. Simultaneity problems are solved by using two-stage least-squares techniques. The results of the empirical analysis conform reasonably well with the predictions of the theoretical model.Keywords
This publication has 7 references indexed in Scilit:
- Campaign expenditures and election outcomes: A critical notePublic Choice, 1977
- A rejoinder to SilbermanPublic Choice, 1976
- Political contribution and policy — Some extensionsPublic Choice, 1975
- Determinants of Participation in Presidential ElectionsThe Journal of Law and Economics, 1975
- The economics of an electionAtlantic Economic Journal, 1975
- The economics of campaign fundsPublic Choice, 1974
- On money, votes, and policy in a democratic societyPublic Choice, 1974