Rational Voters and Political Advertising

Most political scholars agree that organized groups play a key role in modern democracy. One aspect of special interest politics that has caught the attention of both academic researchers and the public at large, especially in the US, are campaign contributions. Candidates to various federal and state o¢ ces receive monetary donations from various corporations and pressure groups.1 What do candidates do with the money they receive from lobbies? In western democracies, politicians appear to use contributions not mainly to increase their personal wealth but rather to …nance their electoral campaigns. While electoral spending includes canvassing, the production of printed material, and organizational costs, it is television advertising that gets the lion’s share of US campaign spending (Ansolabehere and Iyengar [1]). Given this observation, it becomes clear that any theory of special interest politics must explain what political advertising does. Most existing models assume an ad hoc “in‡uence function,”which maps campaign expenditure into vote share (Grossman and Helpman [8, ch. 10]). The more a candidate spends (perhaps in relation to the expenditure of his opponents), the higher the share of voters who vote for him. The problem of modeling the in‡uence function as a black box is twofold. First, results depend on the functional form we choose, but it is unclear what the most plausible form is. Second, we