Electoral Contributions and the Cost of Unpopularity

Economic Inquiry (May 2017, Forthcoming)

57 Pages Posted: 24 Feb 2015 Last revised: 5 May 2017

See all articles by Thomas Bassetti

Thomas Bassetti

University of Padua - Department of Economics

Filippo Pavesi

Università Carlo Cattaneo (LIUC) - Institute of Economics; Stevens Institute of Technology - School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: August 1, 2016

Abstract

When considering electoral campaigns, those candidates that receive contributions from relatively unpopular industries should be regarded less favorably by voters that have information on the sources of funding. To offset this unpopularity effect, politicians may either demand more money for campaign advertising from these industries in order to persuade less informed voters, or shy away from unpopular contributors to avoid losing the support of the informed electorate. Our model predicts that the first effect dominates, and that interest groups related to industries that experience a rise (decline) in unpopularity will increase (decrease) the amount of resources devoted to campaign financing. By using a set of alternative identification strategies to assess the impact of unpopularity on contributions for U.S. House elections, we provide robust evidence in favor of our predictions.

Keywords: Campaign Finance, Interest Groups, Elections, Popularity

JEL Classification: D72, P16

Suggested Citation

Bassetti, Thomas and Pavesi, Filippo, Electoral Contributions and the Cost of Unpopularity (August 1, 2016). Economic Inquiry (May 2017, Forthcoming). Available at SSRN: https://ssrn.com/abstract=2568520 or http://dx.doi.org/10.2139/ssrn.2568520

Thomas Bassetti

University of Padua - Department of Economics ( email )

via Del Santo 33
Padova, 35123
Italy

Filippo Pavesi (Contact Author)

Università Carlo Cattaneo (LIUC) - Institute of Economics ( email )

21053 Castellanza (VA)
Italy

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

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