Interest Group Competition over Campaign Spending and Lobbying

• In Event: Lobbying and Governmental Policy

Abstract

We analyze a game-theoretic model of campaign spending and lobbying. Interest groups may spend money during the election to improve the electoral chances of candidates but may also spend money after the election to influence the policy that the winning candidate implements. Voters anticipate this lobbying and its effect on the final policy when choosing a candidate. When making campaign contributions today, interest groups must therefore anticipate how lobbying will affect the utility associated with electing each of the candidates from the perspectives of both voters and the interest groups themselves. We adopt extant technologies for each of the model's two stages in order to study the role that the polarization of interest groups and candidates has on expected campaign spending, lobbying expenditures, and final policy location in equilibrium. Further, we model several lobbying environments, each featuring different access to the politician. We find that policy moderation and campaign spending move in opposite directions, both within lobbying regime in response to exogenous changes but also when comparing across lobbying regimes. Our results also demonstrate that interest-group and candidate polarization must be considered jointly, as it is the relative values of these quantities that is most important for campaign spending and final policy location.

Authors

• Gregory Sasso, Università Bocconi

• Dan Alexander, University of Rochester