Campaign Contributions and Party-Candidate Competition in Services and Policies

I. Introduction Political parties, their candidates, and their contributors are involved in a complex relationship in which policy positions are taken by parties, candidates compete for votes and for campaign contributions, interest groups and individuals make campaign contributions, elections are held, and successful candidates take actions some of which may benefit their contributors. Electoral competition thus involves both parties and their candidates, and competition takes place both in policy positions and in services provided to constituents and interest groups. In the model, the sophisticated players are parties, candidates, and interest groups, and voters are assumed to be unsophisticated and to vote based on the electoral campaigns. Parties choose policies, candidates provide services, and interest groups make campaign contributions in response to offers of services. The model is intended to reflect the importance of services provided to contributors and to recognize that it is candidates rather than parties that provide services. Furthermore, those services which are private can be provided by whichever candidate is the winner of the election. The model also recognizes that the preferences of parties and candidates can differ, particularly because the candidates and not parties are the providers of services. The theory developed here characterizes the equilibrium relationship among 1) the strategies of parties as they compete through policy position-taking and candidates as they compete by pledging to provide services to interest groups, 2) the campaign contribution strategies of interest groups, and 3) the effect of those contributions on expectations about election outcomes. Parties are assumed to have preferences both for winning and for policy outcomes, and candidates have preferences for being in office but incur a cost of providing constituent ser- _x000B_