We make a positive analysis of the impact of market structure and political preferences on a (local) government's decision to privatize a given service using the framework of Hart, Shleifer and Vishny (1997). We argue that although outsourcing is more attractive when the private market is...

The paper considers public funding of political parties when some voters are poorly informed about parties' candidates and campaigns are informative. For symmetric equilibria, it is shown that more public funding leads parties to chose more moderate candidates, and that an increase in the...