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Define the reflect relative policy stance
We assume that contributions reflect relative policy stance, then the policy positions are perceived only noisily and we get only expected vote totals to have a guess. Thus given the election probabilities depending on the announced policy proposals, the special interest groups contribute to promote the election of the candidate whose position they prefer rather than to change the policy. However, on the other way round, the candidates realize that the contribution they receive is influenced by the policy proposals they have made; they tend to change their policy stand strategically. If they have already converged to some policy stance, there will be no contribution. In fact, interest groups contribute to those who hold the policy stance closed to their ideologies. Some studies focus on the combination of service-induced and policy induced voting. Though models of campaign contribution have been quite interesting, their implications for policy outcome have been no more than that of influencing the policy agenda.
What is Recessionary Bias To illustrate the possibility of recessionary bias we assume that both countries have two policy objectives but only one policy instrument. The policy
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