An Experimental Study of Alternative Campaign Finance Systems: Transparency, Donations and Policy Choices
33 Pages Posted: 22 Jun 2012 Last revised: 6 Mar 2015
Date Written: February 22, 2013
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: Suggested Citation