How is money raised in political campaigns?

Is a lot of money wasted due to re-elections?

• I have often heard the argument that a lot of money will be "wasted" if there are re-elections in India in 2016. The expense in an election are 1) what will be spent by political parties in campaigns, 2) the expense in conducting the elections, and 3) the time cost due to vacation during the election period when people do not go to work. Considering that people sit and watch with leisure cricket matches in India several days of the year, the contribution of 3) is small in the relative sense. Regarding 1), during re-elections, corrupt parties may not be able to raise much money since in the previous election they would have already raised much and would not have been able to return the favors to the sponsors within the short and unstable 2 years before re-election. So, overall re-elections might help non-corrupt candidates to win. Regarding 2), is it really bad for the economy since the money is being spent by the government on the citizens of the country, namely, the printing press of the ballots, and the electoral officers? There are costs of an unstable government, but lets not confuse with the costs of re-elections, not that any of the both can be prevented anyway.

• Answer:

  Point 1 of yours could go the other way too. Corrupt parties are in a better position to raise money because by definition they go out of their way to further the interest of their sponsors. Non-corrupt parties may not be in a position to raise money again which we assume they had raised previously from sources which were most probably of low commercial significance. Interest groups will care about parties that can further their interest most. If we have multiple interest groups supporting a particular party then the burden on each interest group may not be large enough to prevent it from supporting the party in the case of a re-election. About payoffs to the interest groups, you seem to assume that there is only one corrupt party. If more than one interest groups exist then the possibilty of switching exists and will, most probably, be availed.