The welfare effects of political money in regulation

Lodato, Simon ORCID: (2018) The welfare effects of political money in regulation. In: Essex Internal Seminar, Feb 2018, University of Essex, UK. .

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Corporations devote costly efforts to gain access to politicians before elections. The consequent connection between private interests and candidates takes many forms and commonly result in a welfare loss. I then investigate how different types of private interests' pre-electoral contributions affect the choice of a regulatory policy and its welfare consequences. I develop a model where, before candidates announce their policy platforms, a privately informed firm that operates in a regulated market either contributes to candidates' campaigns with a fixed amount or promises a fraction of future profits. I study how these two contribution schemes affect the welfare of voters (and candidates) and the transference of the firm's private information. I also discuss how the welfare effects of the campaign-finance laws depend crucially on the possibility of identifying these two different ways of connection between candidates and private interests.

Item Type: Conference or Workshop Item (Presentation)
Keywords (uncontrolled): Regulation, campaign contributions, candidates’ popularity, communication
Research Areas: A. > Business School > Economics
Item ID: 29041
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Depositing User: Simon Lodato
Date Deposited: 03 Mar 2020 09:12
Last Modified: 03 Mar 2020 09:12

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