An Experimental Study of Alternative Campaign Finance Systems: Transparency, Donations and Policy Choices

33 Pages Posted: 22 Jun 2012 Last revised: 6 Mar 2015

See all articles by Hanming Fang

Hanming Fang

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Dmitry Shapiro

Department of Economics, Seoul National University

Artie Zillante

University of North Carolina (UNC) at Charlotte

Multiple version iconThere are 2 versions of this paper

Date Written: February 22, 2013

Abstract

We experimentally study the transparency effect of alternative campaign finance systems on donations, election outcomes, policy choices, and welfare. Three alternatives are considered: one where donors’ preferences and donations are unobserved by the candidate and public; one where they are observed by the candidate but not the public; and one where they are observed by all. We label them full anonymity (FA), partial anonymity (PA) and no anonymity (NA) respectively. We find that in NA and PA candidates consistently respond to donations by choosing policies favoring the donors. FA, in contrast, is the most successful in limiting the influence of donations on policy choices. Donors benefit greatly from the possibility of donations whereas social welfare may be harmed in some treatments. To our knowledge, this is the first paper that investigates the effect of different campaign finance systems distinguished by their transparency level.

Keywords: Campaign Finance Reform, Elections, Political Contributions, Transparency, Experiments

JEL Classification: D72

Suggested Citation

Fang, Hanming and Shapiro, Dmitry and Zillante, Artie, An Experimental Study of Alternative Campaign Finance Systems: Transparency, Donations and Policy Choices (February 22, 2013). Available at SSRN: https://ssrn.com/abstract=2089520 or http://dx.doi.org/10.2139/ssrn.2089520

Hanming Fang

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Dmitry Shapiro (Contact Author)

Department of Economics, Seoul National University ( email )

San 56-1, Silim-dong, Kwanak-ku
Seoul 151-742

Artie Zillante

University of North Carolina (UNC) at Charlotte ( email )

9201 University City Boulevard
Charlotte, NC 28223
United States

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