Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82123
Authors: 
Ortuño Ortín, Ignacio
Schultz, Christian
Year of Publication: 
2012
Series/Report no.: 
EPRU Working Paper Series 2012-05
Abstract: 
The paper considers public funding of political parties when some voters are poorly informed about parties? candidates and campaigns are informative. For symmetric equilibria, it is shown that more public funding leads parties to chose more moderate candidates, and that an increase in the funding's dependence on vote shares induces further moderation and improves welfare. If parties are asymmetric, vote share dependent public funding bene?ts the large party and makes it moderate its candidate, while the smaller party reacts by choosing a more extremist candidate. On balance, however, if the parties are not too asymmetric, an increase in vote share dependent funding improves welfare and increases the likelihood that a moderate candidate wins the election.
Subjects: 
Political Economy
Parties
Public Funding
Informative Advertising
Campaign Finance
JEL: 
D72
D78
D82
Document Type: 
Working Paper

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