Financial Inclusion in Politics

59 Pages Posted: 6 Feb 2021 Last revised: 12 Mar 2021

See all articles by Abhay Aneja

Abhay Aneja

Stanford University; University of California, Berkeley - Haas School of Business

Jacob M. Grumbach

University of Washington

Abby K. Wood

University of Southern California Gould School of Law

Date Written: February 6, 2021


Our deregulated campaign finance system has a race problem. We use innovations in statistical methods and the universe of campaign contributions for federal elections to analyze the racial distribution of money in American politics between 1980 and 2012. We find that white people are severely overrepresented among donors. A stunning 91% of money contributed to state and federal candidates by individuals has come from non-Hispanic white donors. The racial gap in campaign contributions is significantly greater than the gap in voter participation and elected office holding. It is also relatively constant across time and elected offices.

This result is an important missing piece in the conversation about equity in political participation. We argue that the courts and Congress should take steps to address the racial gaps in campaign finance participation. The participation and representation problems that flow from racial inequality in deregulated campaign finance could inform claims under the Voting Rights Act (VRA), and politico-financial inequalities certainly bear on the normative problems that the statute intends to address. But the most politically viable way to address the campaign finance racial gap lies in adoption of public financing for political campaigns, which offer the promise of increasing the racial representativeness of campaign contributions. When racial representativeness in contributions is improved, improved equality in the distribution of resources and power in electoral and political systems should follow.

Keywords: campaign finance, First Amendment, voting rights, elections, equality, speech, racial wealth gap

Suggested Citation

Aneja, Abhay and Grumbach, Jacob M. and Wood, Abby K., Financial Inclusion in Politics (February 6, 2021). USC CLASS Research Paper No. CLASS21-3, USC Law Legal Studies Paper No. 21-3, Available at SSRN:

Abhay Aneja (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

Jacob M. Grumbach

University of Washington ( email )

Seattle, WA 98195
United States

Abby K. Wood

University of Southern California Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States


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