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Caps on political contributions, monetary penalties and politician preferences
Author(s)
Date Issued
2009-09-07
Date Available
2010-11-26T15:29:34Z
Abstract
With politician preferences over policy outcomes, the effect of a contribution cap with monetary
penalties for exceeding the cap is starkly different from the case with an indifferent politician. In
contrast to Kaplan and Wettstein (AER, 2006) and Gale and Che (AER, 2006), a cap is never neutral
on the expected cost of contributions nor on the policy outcome. Furthermore more restrictive caps
can lead to increased aggregate contributions. When the penalty for exceeding the cap is small
enough that it is impossible to suppress all contributions, the influence of money on policy is
minimized with a binding but non-zero cap and maximized with no cap.
penalties for exceeding the cap is starkly different from the case with an indifferent politician. In
contrast to Kaplan and Wettstein (AER, 2006) and Gale and Che (AER, 2006), a cap is never neutral
on the expected cost of contributions nor on the policy outcome. Furthermore more restrictive caps
can lead to increased aggregate contributions. When the penalty for exceeding the cap is small
enough that it is impossible to suppress all contributions, the influence of money on policy is
minimized with a binding but non-zero cap and maximized with no cap.
Sponsorship
Not applicable
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Series
UCD Centre for Economic Research Working Paper Series
WP 09 12
Classification
D72
C72
Subject – LCSH
Campaign funds--Law and legislation--Ireland
Campaign funds--Mathematical models
Ireland--Politics and government
Web versions
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
File(s)
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wp09.12.pdf
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281.33 KB
Format
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