Electoral Campaign Financing: The Role of Public Contributions and Party Ideology

Abstract

This article analyzes the effects of public financing of electoral campaigns on policies announced by ideologically oriented parties, subject to pre-electoral lobbying. Parties’ ideologies make politicians announce divergent platforms, even though it means losing some votes. Divergent platforms, in turn, make lobbies actually contribute to parties’ electoral campaigns. The announced platforms are biased in favor of the parties’ ideology and interest groups’ preferred policies. Finally, increasing public financing of electoral campaigns may generate unequal electoral competition and may significantly raise the chances of one party becoming hegemonic, wiping out party competition in the long run.