A Theory of Small Campaign Contributions

51 Pages Posted: 20 Mar 2018 Last revised: 17 Mar 2022

See all articles by Laurent Bouton

Laurent Bouton

Georgetown University - Department of Economics

Micael Castanheira

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES); Centre for Economic Policy Research (CEPR)

Allan Drazen

University of Maryland - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2018

Abstract

We propose a theory of small campaign contributions driven by an electoral motive, i.e., the desire to influence election outcomes. Though small donors take as given the actions of others, strategic interactions induce patterns consistent with empirical findings, e.g., election closeness and underdog effects. We also study different forms of campaign finance laws, and show why caps should be combined with a progressive tax on contributions. Next, we introduce large donors and show that several conclusions in the literature may be significantly modified by the interaction with small donors. Throughout, we discuss the empirical implications of our findings.

Suggested Citation

Bouton, Laurent and Castanheira, Micael and Drazen, Allan, A Theory of Small Campaign Contributions (March 2018). NBER Working Paper No. w24413, Available at SSRN: https://ssrn.com/abstract=3143338

Laurent Bouton (Contact Author)

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States

Micael Castanheira

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium
+32 2 650 4467 (Phone)
+32 2 650 3369 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Allan Drazen

University of Maryland - Department of Economics ( email )

College Park, MD 20742-1815
United States
301-405-3477 (Phone)
301-405-7835 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
17
Abstract Views
272
PlumX Metrics