Lobbying, campaign contributions, and electoral competition

Thanh Le, Erkan Yalcin

Research output: Contribution to journalArticle

Abstract

This paper studies the effect of lobby groups on electoral competition and equilibrium policy outcomes employing a ‘money for policy favours’ model of lobbying. Our results show that when a lobby group seeks to influence an electoral outcome, it will make a financial contribution to only one political party whose policy is closely aligned to its own ideal policy. When misappropriation of campaign funds occurs, political parties that divert more funds for personal gain stand on more independent platforms and require larger contributions from lobby groups. Greater electoral competition could reduce policy distortions but this, in turn, sparks more intense lobbying thereby increasing the scope of misappropriation of funds. In the case of multiple lobbying, political parties either demand different levels of campaign contributions or leave them with different levels of satisfaction.

Original languageEnglish
Pages (from-to)559-572
Number of pages14
JournalEuropean Journal of Political Economy
Volume55
DOIs
Publication statusPublished - Dec 2018

Keywords

  • Special interest politics
  • Lobbying
  • Political competition
  • Campaign contributions

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