On the distribution of public funding to political parties

Troumpounis, Orestis (2012) On the distribution of public funding to political parties. Economics Letters, 116 (3). pp. 367-370. ISSN 0165-1765

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The distribution of direct public funding to political parties is based on two criteria: (1) performance at the election (funding per vote), or (2) representation in the parliament (funding per seat). Using a two-party group turnout model, we compare the effect of the two funding systems on parties’ mobilization effort and the equilibrium turnout. Allowing one party to have a larger support than the other, we uncover interesting differences regarding the equilibrium structure: while in the unique equilibrium of per seat funding systems both parties exert the same amount of effort, a per vote funding system results in an asymmetric equilibrium in which the advantaged party exerts higher effort than its opponent. We furthermore show that, at the same cost, a per vote funding system always yields higher turnout than a per seat funding system, sacrificing the representativity of the electoral outcome.

Item Type:
Journal Article
Journal or Publication Title:
Economics Letters
Uncontrolled Keywords:
?? public fundingturnout mobilization effort group-turnout model campaign financefinanceeconomics and econometrics ??
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Deposited On:
24 May 2013 08:54
Last Modified:
15 Jul 2024 13:57