Polarized Contributions but Convergent Agendas

Drautzburg, Thorsten; Livshits, Igor; Wright, Mark L. J.

doi:10.21799/frbp.wp.2026.05

Working Paper

Polarized Contributions but Convergent Agendas

Abstract: In a canonical model of policy formation, campaign contributions, and electoral competition, we show that, despite donor polarization, candidates’ agendas converge. If purely office-motivated candidates move away from the centrist agenda, they increase their opponents’ contributions more than their own. An extension that introduces a “job ladder” for the candidates leads to candidates caring about absolute levels of campaign contributions and generates divergence of political agendas in equilibrium. We provide empirical evidence of campaign contributions affecting candidates’ chances of “promotion,” and characterize key comparative statics of the extended model. In the model, caps on campaign contributions lower polarization in equilibrium.

JEL Classification: D72; H41;

https://doi.org/10.21799/frbp.wp.2026.05