Selling Favors in the Lab: Experiments on Campaign Finance Reform

50 Pages Posted: 17 Apr 2006

See all articles by Daniel Houser

Daniel Houser

George Mason University - Department of Economics; Interdisciplinary Center for Economic Science; George Mason University - Mercatus Center

Thomas Stratmann

George Mason University - Buchanan Center Political Economy; George Mason University - Mercatus Center; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: May 2006

Abstract

Substantial public policy debate centers on campaign finance reform. Campaign resources can provide benefits to constituencies when used to fund the distribution of information, but voters can be harmed if candidates trade policy favors to special interests in exchange for contributions. Unfortunately, because informative field data on this topic are limited, effects of campaign finance strategies on election outcomes and economic welfare remain uninformed by empirical analyses. This paper reports data from experiments designed to shed light on the campaign finance debate. Our experiment derives from a model where power-hungry candidates trade favors for campaign contributions. We find that voters' beliefs respond to advertising in a way that is consistent with theory. In relation to privately financed electoral competitions, in publicly financed campaigns (i) high quality candidates are elected more frequently, and (ii) margins of victory are larger. We also find that caps on private fundraising can improve voter welfare.

Keywords: voting, campaign finance, experiments, special interests

JEL Classification: C92, D72, D82

Suggested Citation

Houser, Daniel and Stratmann, Thomas, Selling Favors in the Lab: Experiments on Campaign Finance Reform (May 2006). CESifo Working Paper Series No. 1727, Available at SSRN: https://ssrn.com/abstract=895620

Daniel Houser (Contact Author)

George Mason University - Department of Economics ( email )

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Interdisciplinary Center for Economic Science ( email )

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HOME PAGE: http://mason.gmu.edu/~dhouser/

George Mason University - Mercatus Center ( email )

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Thomas Stratmann

George Mason University - Buchanan Center Political Economy ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-2330 (Phone)

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

HOME PAGE: http://www.mercatus.org/scholars/thomas-stratmann

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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