Is Private Campaign Finance a Good Thing? Estimates of the Potential Informational Benefits

Author(s): Andrea Prat;Riccardo Puglisi;James M.Snyder, Jr.

Source:
    Journal:Quarterly Journal of Political Science
    ISSN Print:1554-0626,  ISSN Online:1554-0634
    Publisher:Now Publishers
    Volume 5 Number 3,

Document Type: Article
Pages: 28 (291-318)
DOI: 10.1561/100.00008081

Abstract: What would happen if the current U.S. campaign finance system, mostly based on private donations, were replaced by a public funding scheme of the same magnitude? Some argue that public funding would deprive voters of useful information, but this can only be true if private donations are somehow targeted to "better" candidates. In this paper, we ask what voters can learn about the "effectiveness" of a legislator from the amount and pattern of contributions received during the campaign. We find that the total amount that a candidate receives is a positive, but weak, predictor of that candidate's effectiveness. Small contributions provide a strong and positive signal of effectiveness, while large contributions are a negative signal of effectiveness. Contributions from organizations also provide a positive signal, while contributions from individuals, parties, and candidates themselves do not.

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