Campaign Spending and Lobbying

Interest groups can influence governmental policy through multiple channels. First, they may spend money before elections to help elect their preferred candidate. Second, they may also lobby after the election to affect the implemented policy. We analyze a game-theoretic model of campaign spending and lobbying to understand the strategic relationship between these two means of outside influence. We consider how several lobbying environments, each featuring different access to the elected politician, affect both the willingness to spend during the campaign and the final policy. Campaign spending is a function of both expected final policy due to lobbying and also expected lobbying effort costs. We find that increased policy moderation often, but not always, accompanies decreased campaign spending. When extreme interest groups give campaign contributions in exchange for access, campaign spending decreases as policy becomes more extreme. Open-access lobbying, where all interest groups lobby regardless of ideological alignment, is always best for the voter. We then show that caps on campaign contributions may have minimal effect on policy because of later lobbying efficacy. Finally, we highlight comparative statics that predict different empirical patterns of contributions depending on whether politicians grant lobbying access to all interest groups or only to ideologically-aligned groups. Our results demonstrate that interest-group and candidate polarization must be considered relative to one another; the effect of greater interest-group polarization depends to a large extent on whether it implies more or less ideological proximity to the group's aligned candidate.