Why the political party that supports social welfare programs is advantaged in campaign fundraising

Abstract

This study examines a collective action contest between two groups of charitably-minded, rational altruists. The groups are supporters of two political parties that oppose each other in their support for a redistributive tax and social welfare benefit. Analysis identifies an asymmetry in the incentive structure that creates a fundraising advantage for the pro-redistributive party. Big government altruists (BGAs) choose between contributing to charity (i.e., individual voluntary redistribution) and contributing to the political party that supports compulsory redistribution from all of the rich to the poor. Small government altruists (SGAs) choose between contributing to charity and contributing to the political party that tries to stop compulsory redistribution from all of the rich to the poor. In other words, while BGAs choose between individual voluntary redistribution and supporting universal compulsory redistribution, SGAs choose between individual voluntary redistribution and opposing universal compulsory redistribution. Because of this asymmetry, BGAs can advance their redistributive goals (as well as their political goals) via campaign contributing while SGAs cannot. This difference creates a fundraising advantage for the pro-redistributive party. Relative to the other group, BGAs optimize by giving more to party and less to charity and SGAs optimize by giving more to charity and less to party.