The name is absent

lobby officials working in the political campaign.⁹ According to (2.17), the more
the campaign effort in support of party B exceeds the effort in favour of party A,
the stronger is the voter bias in favour of party B on election day. We assume that
campaign efforts cannot be negative, i.e. the lobby cannot extract real resources
from politicians, only political concessions. Let p_A denote the probability that
party A wins the election so that 1 - pA is the probability that party B carries
the election day. Lobby officials choose their campaign efforts to maximise the
following objective function (L), representing the lobby members’ expected utility
from the election outcome, net of the cost of lobby effort:

L = ^pAUA + (1 ^{- p}A) UB ^- 2 (^ZA + ZB)             (2.1⁸)

2

The negative third term in (2.18) assumes convex costs of campaign efforts, reflect-
ing increasing marginal disutility of effort. Note that the individual ideological
preferences have cancelled out in the lobby’s objective function, since the prefer-
ence variable ρ_i^j has zero mean value and the lobby maximises the average utility
of its members.

The timing of political events is as follows: 1) Each party announces a fiscal
policy package, taking the number of insiders and the policy platform chosen by
the other party as given. 2) Lobby officials choose their campaign efforts. 3)
‘Nature’ chooses the value of the stochastic voter preference variable ω . 4) Elec-
tions are held. 5) The pre-announced policy of the winning party is implemented,
and the ‘marginal’ public sector jobs are allocated among outsiders (by a proces
to be specified below). For simplicity we assume that the individual ideological
preferences ρ_i^j and ρ_o^v follow an identical uniform distribution and that the general
ideological preference variable ω is uniformly distributed on the interval — ɪ, ₂ψ .
On these assumptions Appendix 1 demonstrates that the optimal campaign efforts
are

Z_a = max [θ,α_iψh (UA — UB)] , ZB = max [θ,α_iψh (UB — U^A)] . (2.19)

⁹The ZP -variables could also be interpreted as monetary campaign contributions. The exact
interpretation is unimportant since ZP will be zero in political equilibrium, as we demonstrate
below.

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