A Model of Optimizing Political Expenditures to Buy Government Power

Abstract

This research develops a model of optimal political expenditures that is integrated with a theory of voters maximizing their personal utility at the ballot box and that shows how money inevitably controls government leaders. The paper also demonstrates theoretically why many businesses do not make such investments despite returns on the expended political capital tending to be abnormally high. Recent worldwide events reported in the press are utilized to illustrate the general applicability of the model to the many varying ways wealthy agents control government, as well as indicate how the model variables can be estimated from actual polling results.

Keywords: lobbying, political capital, elections, money, government

JEL Classification: J42