New Report Explores Citizen Funding for Elections

The Campaign Finance Institute this week released a new report written by Michael J. Malbin – CFI’s executive director and a professor of political science at the University at Albany – titled, “Citizen Funding for Elections: What do we know? What are the effects? What are the options?”

The following description is excerpted from the executive summary:

Political campaigns have always been financed disproportionately by people with above average incomes. But the balance has tilted almost beyond recognition since the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission. As a result, a number of jurisdictions have been looking recently to re-balance the incentives through new (or updated) citizen funding programs or tax credits to enhance the role of small donors.

When looking at these new programs and proposals, it is striking how common impulses have led to a wide variety of policy ideas, and an even wider set of justifications and expectations about what the new programs are meant to accomplish. Some want to drive money out of politics; some to increase competition; some to bring a different type of politician into office; and some to enhance participation. In light of this policy ferment, this report seeks to lay out for policy makers what is known and not yet known about whether citizen funding and other incentive programs have accomplished or are likely to accomplish their stated goals.

The conclusions?

    • It is obvious – certainly in the new world of independent spending – that citizen funding programs do not and cannot squeeze private money out of politics.
    • However, a properly designed program can increase the proportional importance of small donors to candidates and increase participation by an economically and demographically more representative cadre of campaign supporters. Candidates may choose to depend on large donors if they wish, but a well-structured program can make it possible for a candidate to choose otherwise. In the most effective programs, substantial percentages of the candidates make this choice and participate.
    • Interestingly, these results probably do not occur because small donors react spontaneously and directly to matching funds or tax credits. Instead, the research suggests (but is not yet conclusive) that the incentives work by affecting candidates (or political parties and other intermediary actors). The small donors are worth more (both financially and as volunteers), so the candidates and others are willing to spend more time and resources to mobilize them.
    • Whether increasing small donors will favor political polarization will depend on a program’s details, but small donors generally are not more polarized than other individual donors.
    • Citizen funding may also affect other aspects of a candidate’s behavior – from deciding to run, to how they conduct campaigns. However, the research here is not fully settled.
    • The findings are similarly mixed with respect to electoral competition. Public money seems to help when competition is defined one way (focusing on whether races are uncontested or whether candidates run), but not if defined differently (with a focus on the margins of victory in competitive races, or the defeat of incumbents).
    • Research on the post-election effects in government finds more of an impact on agenda-setting than on end-stage roll call votes.
    • Policy-makers need to be aware that answers often depend upon the precise questions asked.
    • The research shows that a program’s fine-grained details can make a huge difference in outcomes. For supporters of citizen funding or tax incentives, this means that passing a program with a good-sounding label will not be enough to accomplish their goals. Neither will it be enough to focus only on what their supporters think they can “sell”. Selling may be a necessary condition for accomplishing goals, but not a sufficient condition. The politics of persuasion is not policy analysis. A program that works will be based on the best available evidence – including the best practices for implementation after a bill becomes law.

The report concludes with the following:

Incentive programs do not accomplish everything their supporters have enthusiastically claimed for them. But what they accomplish can be quite significant…. Today’s incentives produce today’s politics. Changing the incentives could change tomorrow’s.

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