Public Election Funding: An Assessment of What We Would ... · Public Election Funding: An Assessment of What We Would Like to Know Kenneth R. Mayer Department of Political Science

Public Election Funding: An Assessment of What We

Would Like to Know

Kenneth R. Mayer

Department of Political Science

University of Wisconsin-Madison

[email protected]

Final draft of paper to be published in

The Forum: A Journal of Applied Research in Contemporary Politics

Volume 11, Issue No. 3 (October 2013), p. 365-384.

Please note that this is a final draft submitted to The Forum, subject to slight last

minute editing by The Forum. Consult the published version for exact quotations.

This paper is one of a series commissioned as part the Campaign Finance Institute/Bipartisan Policy Center

Working Group on Money in Politics Research Agenda.

For more on the working group and to see other papers, visit:

http://www.cfinst.org/moneyandpolitics_scholarsAgenda.aspx

Public Election Funding: An Assessment of What We Would Like to Know

Kenneth R. Mayer

Department of Political Science

University of Wisconsin-Madison

[email protected]

Abstract

The implementation and expansion of public funding programs around the U.S. over the past decade raised the possibility of major changes in the financing of campaigns at the state and local level. Advocates claimed that these programs increased electoral competition, reduced the influence of campaign contributors and lobbyists, and change the distribution of political power. While there was evidence of a modest increase in competitiveness (primarily through reducing the number of incumbents who ran uncontested), the longer term pattern has shown no significant change in incumbency reelection rates, margins of victory, or legislature demographics. Claims of major policy change have also been overstated. The Supreme Court’s rejection of spending triggers for additional grant awards (in Arizona Free Enterprise PAC v. Bennett) makes full public funding programs less attractive, since public funding candidates are less able to keep pace with high-spending opponents or independent expenditures. Future research should focus on how these programs affect how candidates and legislators engage with the public.

Key Words: public funding, clean elections, electoral competition, state legislatures

Bio: Kenneth R. Mayer is Professor of Political Science and Affiliate Faculty of the Robert M. La Follette School if Public Affairs at the University of Wisconsin-Madison. His research has focused on public funding at the state level, election administration, and American politics. He has been active as an expert witness in campaign finance, redistricting, and voter-ID litigation in state and federal courts.

CFI/BPC Working Group on Money-in-Politics Research Agenda 1

Public funding programs have been around since the 1970s, with the first wave enacted

during the post-Watergate reform era. A second wave occurred over the past fifteen years with

the implementation of “Clean Elections” laws in Maine in 2000, Arizona in 2002, and

Connecticut in 2008. Several cities began programs as well, notably New York City, but also

Los Angeles, San Francisco, Albuquerque, and (for a while) Portland. These programs were

often prompted by scandal, at other times by a desire to cleanse politics of the effects of private

contributions, and occasionally by a normative impulse to open up the political process to

outsiders who would have difficulty tapping into existing fundraising networks.

My goal in this essay is to suggest ways that we can identify and analyze hypotheses

about the effect of public funding programs, and add nuance and empirical validity to our

understanding of the effects. Apart from summarizing what we already know, I will focus on

three things that we would like to know but so far do not, and how we might attack such

questions.

The first is why clean elections programs appear to have only a modest effect on electoral

outcomes. Even generously funded programs, such as Connecticut’s, have had at best a marginal

impact on election results or candidate demographics; the primary significant effect is a smaller

number of uncontested seats. Public funding does not, as far as we can tell, dramatically alter the

decision calculus of quality candidates thinking about entering the ring. Other measures of

competitiveness occasionally show significant change in the first few election cycles, and then

return to pre-reform levels. Does this reflect some kind of equilibrium in the electoral system?

Strategic adaptation among the different actors in the process? Or is it evidence of limits to the

effects of even a significant change to the campaign finance regime? Additional study of public

funding systems may lead to a better understanding of the complex interaction among candidate

quality, spending levels, strategic forecasts of the prospects of winning, and responses of the

other participants in the process. And it can give us a better idea of how much impact the

Supreme Court’s decision in Arizona Free Enterprise Club PAC vs. Bennett 564 U.S. ___ (2011)

to strike down spending triggers for matching fund awards will have on clean elections programs

in the long term.


The second is whether public funding changes policy. Among reform advocates the

relationship between campaign contributions and policy decisions is axiomatic, although

political scientists have generally concluded that things are far more complicated than such direct

arguments allow. If advocates are correct, then changing the donor-candidate relationship, or

even taking private money out of the process, should lead to clear changes in elected officials’

behavior and decision making. Ultimately, this should mean that policy should change. Does

it? While there are many anecdotal accounts of policy shifts occurring in the wake of clean

elections programs (in particular), as yet there have not been rigorous studies that have

demonstrated significant effects on legislative, regulatory, or other policy outcomes.

The third is whether competitiveness is the right place to look for evidence that public

funding has an effect on the political system. Discrete electoral outcomes – the number of

candidates, victory margins, incumbency reelection – have the advantage of being unambiguous

and easy to measure. But after a decade of going over election results, we have likely extracted

as much information as we will be able to from the past seven cycles; additional data will

probably not dramatically alter the inferences already drawn. But there are other possibilities

that look not at candidates, but at voters and engagement: recent work examining the effect of

matching fund programs on the composition of the donor pool, how public funding changes the

way that candidates interact with the electorate; whether clean elections changes the way that

constituents relate to elected officials. Some initial analysis of New York City’s matching

system has shown significant changes in who donates money (and, by inference, whom

candidates look to for contributions), and in the engagement of poorer and more diverse areas of

the city.

The Basics

Public funding takes several forms: the most common comprehensive programs are fixed

grants to candidates that subsidize a portion of campaign spending; systems that match

qualifying contributions to candidates; or “clean elections” programs designed to fund all of a

candidate’s campaign spending, taking private fundraising out of the picture entirely. Most

programs provide funds directly to candidates, though some systems offer grants to political


parties or tax credits for small contributors. Public funding programs exist at all levels of

government except congressional elections: in various states candidates for local office, state

legislatures, statewide office, or for judicial positions can qualify. Presidential candidates can

receive matching funds in the primaries and lump sum grants in the general election.

Internationally, public funding for political parties is the norm in industrialized democracies.

Table 1 shows the state programs that exist in 2013

These varied program types and locales hold the prospect of gaining leverage in

understanding how different campaign finance regimes affect electoral and policy outcomes.

Does public funding make elections more competitive? Make the candidate pool more diverse?

Change the way that legislators and candidates spend their time? Produce policies different than

what would be enacted without public funds?

The goals of public funding fall into two categories: process goals and policy goals.

Process-oriented reform is designed to change the underlying dynamics of elections, candidate

emergence, and voter and donor engagement with the electoral process. Process-effects change

the political process by themselves, even if they do not ultimately affect the decisions that

elected officials make. Spending more time interacting with voters and less time raising money

is a positive effect in its own right, as are improving public confidence in the political process

and enhancing representation. More competitive elections are important as they provide options

to voters and increase the likelihood that winners reflect the true preferences of the electorate.

Policy effects should (in theory) lead to changes in decision making as incumbents return their

focus to representation and to judgment about what’s best for the country or state or city, and

away from what’s best for their campaign contributors.

Most process reforms are intermediaries in the causal chain tying public funding to policy

outcomes. If changes in government membership occur, it matters partly because there are

different dimensions to representation, but mostly because of the presumption that a different set

of incumbents will make different decisions based on different motivations. If elections become

more competitive, that matters because incumbents will likely pay more attention to their

constituents and may make different policy decisions as a result, and because voters who can

kick the rascals out will have more control over elected officials. To reformers, reducing

dependence on large contributions or increasing the importance of small contributions is


important in its own right, but also because it changes the way that incumbents relate to their

constituents or even who they regard as their main constituency.

Over the past decade, scholars have analyzed these programs to see what effect they have

on elections. On the whole, this work has found a modest impact on electoral competitiveness

and little effect on legislative membership. More recent studies have found that matching

systems can change the composition of the donor pool, increasing the value of small

contributions and enlarging the number of people who give to candidates. Surprisingly, scholars

have devoted less attention to the question of whether (or how) public funding changes policy;

while popular accounts claim that interest groups see their influence decline when legislators no

longer need campaign contributions, there have been few detailed studies.

One potentially promising line of inquiry focuses on judicial elections, and the effect of

campaign finance regimes on judges. The question here is not so much one of how large or

small is the effect of campaign contributions, but whether contributions have any effect on

judicial decision making. Judges perform a very different function than that of legislators.

While we might wish legislators to act in a Burkean manner, setting aside their parochial

concerns in favor of exercising judgment about what is best for society, nobody can be surprised

at the logrolling, favoritism, bias, and self-interested behavior that goes on in legislatures. We

do expect judges to be independent and impartial, in theory at least, even though they will often

fall short of the ideal.

Judicial elections aim at the precarious balance between judicial independence and a

degree of public accountability, and there is an active literature on whether such elections are a

good idea (Goldberg 2003; Horwitz 2008; Kang and Shepherd 2011). However, few would

contest the notion that judges should not show favoritism toward large contributors, or have a

financial stake in a case before them. In Caperton v. Massey Coal Co. 556 U.S. __ (2009), the

Supreme Court concluded that judges must recuse themselves when they have received large

campaign contributions from one party in a case before them. The difference between judicial

bias and legislative bias is the importance of “due process” in judicial proceedings, which

requires an absence of even potential bias. There is no analogous requirement in legislative

decision making, where influence is not a constitutional problem: “That speakers may have


influence over or access to elected officials does not mean that those officials are corrupt.”

Citizens United v. FEC, 558 U.S. ___ (2010), 43.

We also have a substantial body of evidence from other industrialized democracies,

where public funding is the norm.1 Other countries often have dramatically different electoral

systems, party structures, and norms and laws about campaign speech that make it difficult to

draw strong inferences about how the effects of public funding apply to the United States. A key

difference is that the U.S. has a candidate-based separation-of-powers system, while most other

democracies use a parliamentary system based on strong parties. Some of the claimed benefits

of strong public funding systems are contingent on a variety of other systemic factors that have

no counterpart in the U.S., such as “short electoral campaigns, widespread public ownership of

broadcasting stations, the banning of TV and radio political advertising outside the slots

allocated by the State” (Casoas-Zamora 2008, 19) , spending limits, prohibitions on certain types

of campaign activity, outright bans on private contributions to parties or candidates, and other

provisions that would be patently unconstitutional here. Still, we may be able to learn something

from those systems, particularly as to how groups and individuals adapt to restrictive rules as

they continue to protect and promote their political and economic interests and views (Koβ

2011).

Public Funding and Competitiveness

To date, most research on public funding has examined its effect on electoral

competitiveness. This has the advantage of focusing on measurable outcomes – numbers of

candidates and contested races; electoral margins; incumbency reelection rates – and makes use

of widely available data. The reasonable expectation is that public funding programs will

increase competition levels by removing entry barriers that deter many potential candidates from

even thinking about coming forward, and by making it easier for candidates (particularly

challengers) to amass the resources necessary to run a credible campaign. More contested races

1 According to the Institute for Democracy and Electoral Assistance, three quarters of nations provide some sort of

public funding, in the form of direct or indirect support to parties, or free television time. Since its origins in the 1950s “it has been adopted by almost all the stable democracies and became the dominate pattern among the new and emerging democracies in all regions of the world” (Mendilow 2012,1).


and better funded candidates should, quite plausibly, lead to more competition and smaller

advantages for incumbents.

Any analysis of the effects of public funding on election outcomes confronts a substantial

endogeneity problem: a candidate’s choice to accept or decline public funding may depend on

the projected competitiveness of the election (the variable we are interested in studying).

Candidates who participate will do so for a variety of reasons: some because they have no other

option; some because they support the principle of public funding even if it lowers their chances

of winning; others because they think it gives them the best chance of winning. Some will

decline because they are ideologically opposed to public funding no matter the consequences for

their own electoral prospects; others because they conclude that private fundraising gives them

the best chance to win. It will be very difficult to distinguish races that are competitive because

candidates took public funding, from races where candidates took public funding because they

expected the race to be competitive.

If candidates accept public funding when they think the campaign will be close, we will

observe that contests with publicly funded candidates are more competitive than contests without

them. Conversely, if candidates accept public funding because they think they have no chance of

winning, and would not even bother to run without it, we will observe that public funding is

associated with less competitive outcomes; this is also what we will see if experienced high

quality candidates are more likely to decline public funding and low quality challengers are more

likely to take it. Even if public funding has no independent effect on competitiveness, we could

still see very strong (though false) relationship.2

The results show that clean elections laws in particular have increased some measures of

competitiveness in state legislative elections, primarily by reducing the number of uncontested

seats and slightly reducing the incumbency advantage (Mayer, Werner and Williams 2004;

Malhotra 2008; Werner and Mayer 2012). There is little evidence that contested elections are

2 Studies of campaign expenditures have the same difficulty, in that incumbents who are in electoral trouble tend to

spend more than those with no real opposition, leading to the simple (but inaccurate) conclusion that there is an inverse relationship between spending and votes. Accurate inferences require controlling for the expected competitiveness of the campaign; see Jacobsen (1978). In congressional elections, researchers can control for baseline competitiveness by examining candidate experience, prior service in elected office, or partisan balance in

the constituency. For state legislative elections, this information is much harder to find.


more competitive or that incumbent reelection rates have declined. In Connecticut, despite high

grant levels and generous matching fund provisions that offered challengers up to six times what

they typically had spent in previous cycles, competition measures scarcely budged in 2008,

increased slightly in 2010, and then returned to pre-reform levels in 2012 except for the

percentage of incumbents in contested races which continued to rise (Figure 1). Other more

limited forms of public funding have even less of an effect. Kraus’s (2011, 162-166) study of

the New York City public funding program, which matches small contributions with in multiples

(now a 6 to 1 match for contributions up to $175) found that it had little effect on

competitiveness, and that early indications that it had stemmed from the huge number of open

seats in the 2001 election caused by term limits (37 out of 51 seats).

The results in statewide elections are even more attenuated. Evidence suggests that at

lower rungs on the electoral ladder, public funding can have a marginal effect on candidate

recruitment, but not as one moves up: as the stage gets larger, candidates tend to have more

experience and skills, and don’t need public funds as much as those lower on the food chain (this

is one reason why acceptance rates are lower in state senate races than in state house races; see

Werner and Mayer 2007). Statewide candidates generally have extensive political experience

and are well known, which means that they will have other skills that can offset financial

disadvantages. Primo, Milyo and Groseclose (2006) conclude that public funding has no

appreciable effect on the competitiveness of gubernatorial elections.

We are left with the puzzle of why the competitive effects are not larger, especially when

generous clean election systems are implemented. How could a doubling or tripling of

challenger spending not lead to closer elections? Why would competition increase in the short

term, but return to historical norms soon after? Perhaps some of the candidates who came

forward as a result of public funding were poor choices who might have been screened out if

they had to raise their own funds. Public funding might produce a higher number of lower

quality candidates, which would simultaneously explain the increase in contested races but no

change in competitive ones.3

3 An additional empirical difficulty is distinguishing the effects of clean elections from other changes in electoral

systems that occurred at (or around) the same time. Term limits took effect in Maine in 1996 and Arizona in 2000 (the years when legislators were first termed out). Arizona changed its redistricting process in 2000, creating an


The introduction of multiple shocks to electoral systems may give us the ability to test

whether those systems have a type of equilibrium. The “hydraulic” theory of campaign finance

posits that political influence is similar to water, in that efforts to reduce it merely redirect it, as

“every reform effort to constrain political actors produces a corresponding series of reactions by

those with power to hold onto it” (Issacharoff and Karlan 1998, 1705). If that is an accurate

conceptual frame, we should see the effects more broadly as a general restoration of

longstanding channels of political behavior.

A broad theoretical literature suggests there are in fact equilibria in political systems.

Political structures tend to be enduring absent huge exogenous shocks; in a given system there is

usually a degree of regularity in outcomes, and change tends to occur incrementally. Individuals

adapt to particular institutional settings and behave in ways that are consistent with the payoffs

and incentives of those settings. Formal models suggest the best responses of one actor to the

strategies of other actors: other things being equal, it is always in a candidate’s interest to spend

more money rather than less (though this is more complicated if we have to specify how a

candidate obtains that additional money), and always in an incumbent’s interest to amass a large

war chest so as to appear invulnerable and discourage challengers from even arising. Almost

always, the candidate with more money wins, incumbents beat challengers, and experienced

candidates do better than political novices. These outcomes are easily explained by the structure

of the electoral process, and can properly be considered equilibria, at least in a rhetorical if not

formal sense.

Much of the literature on electoral system equilibria addresses the big picture: the number

of political parties, responsiveness to the median voter, where parties locate themselves

ideologically, based on the fundamentals of a particular system (Benoit 2004, 377). Public

funding is not so much an electoral system change, as a campaign process change. The logic of

reform is similar, but the consequences will almost certainly be less dramatic. Another way of

thinking about it is to postulate that legislators will vote for reforms when the political cost of

voting for the reform is less than the cost of not voting for reform.

independent commission to redraw state and congressional district lines after the 2000 Census. One of the requirements for the new Arizona Independent Redistricting Commission was to create competitive districts, and data support the conclusion that it did (McDonald 2006).


Thinking about outcomes as equilibria points to the conclusion that a significant shock to

one variable may not lead to dramatic changes in outcomes. If this is a true equilibrium, it also

means that even after larger shocks the system should return to its original condition (or

something close to it). It would take a huge shock – moving from single member districts to

proportional representation, changing a presidential system to a parliamentary system, adopting a

new constitution – to fundamentally alter institutional arrangements and outcomes, and even here

we could expect participants to alter their behavior and adapt to the new circumstances in order

to promote their policy preferences.

What We Do Not Know: Policy Effects of Public Funding

The most important (and so far, unanswered) question is whether public funding affects

policy. If government decisions are influenced by campaign contributions (something that

reform advocates accept as an article of faith, although the substantive connection between the

two are more difficult to show), then removing private money from the process should lead to

major changes in policy, While it is easy enough to find emphatic claims of such effects, it is

much harder to trace policy shifts to public funds as a causal mechanism.

The implementation of clean elections in Maine, Arizona, and Connecticut offer a natural

experiment which holds the promise of showing how a significant shock to the political system

affected public policy. Each of these states went from a privately funded campaign finance

regime to a publicly funded system in which a large number of candidates and officeholders ran

without taking any appreciable private contributions. We can start to answer the question of

what happens when private money is largely driven out of the electoral process. If legislators are

beholden to their campaign contributors, we should see substantial changes in behavior and

outcomes once incumbents are freed from this dependence. If private money is the literal

currency through which political deals are conducted, public funding could rearrange political

influence away from narrow interests.

In this natural experiment, clean elections could affect legislative outcomes in several

different ways. It could be a sufficient condition for change, in that no other forces need to come

into play for a legislature to produce new policies. It could be a necessary condition, in that


removing private money is not enough by itself, but allows other forms of lobbying and

influence to gain traction and push legislation through. If we observe significant policy change,

the logic of a natural experiment suggests that public funding could be the cause. At the same

time, it is important not to fall into the trap of post hoc fallacy of concluding that anything that

happened after the implementation of clean elections was caused by clean elections.

It is also possible that we will not observe much of anything, especially if the hydraulic

metaphor is accurate. Interest groups will not give up efforts to influence policy, but will shift

to new strategies if public funding (or any other campaign finance reform) cuts off existing

channels. The history of campaign finance reforms has demonstrated again and again how

political practices adapt to new rules and restrictions.

Proponents of public funding often point to specific policies adopted in the immediate

wake of clean elections implementation as clear evidence that the programs have wrested

influence from well-funded private interests. Outcomes as varied as prescription drug price

control and a bottle deposit law reform were attributed to clean elections laws in Maine and

Connecticut, respectively (Green 2000; Phaneuf 2012). A 2012 account went further, tracing

“in-state tuition for illegal immigrants, a transgender-rights bill, a major genetics research

initiative, a bipartisan job-growth package, and the nation’s first paid sick-leave mandate” to

clean elections in Connecticut (Phaneuf 2012, 54).

Are these accounts correct? A model built around a “contributions = policy” axiom may

be seductively simple, since any change in policy is by definition linked to changes in campaign

finance law. But it is more likely that the policy changes stem from a much more complicated

picture in which campaign contributions are only one part (see Mayer 2001).

To consider the instant cases, charges that pharmaceutical manufacturers had blocked

drug price controls in Maine but lost their grip on the legislature after clean elections must be

viewed in light of two things: the first is that the bill passed before the first publicly funded

election cycle took place; the second is the industry’s near total absence in state politics when the

bill passed. The first general elections under the clean elections program took place in

November 2000. The legislature considered the prescription legislation months earlier, in April

and May. Publicly funded incumbents could have been looking toward a future with fewer


campaign contributions from the industry. But the fact that so few legislators took contributions

from the industry may have meant that money simply did not play a role.

Contributions from pharmaceutical manufacturers to all state candidates totaled $15,020

in the three election cycles prior to the enactment of the Maine Rx Program in 2000, or about

0.12% of the $12.3 million total contributed in those cycles.4 In the election cycles

immediately before and after the adoption of the law (1998 and 2000), drug companies donated a

total of $13,935 to twenty nine legislative incumbents in office when the bill was passed (state

parties received another $11,200), less than one-sixth of all members.

Far from being a potent lobbying force, the pharmaceutical industry was mostly absent

from state politics when the prescription drug bill passed. One account argued manufacturers

lost because they “failed to take the state seriously, [a] mistake that could cost them a fortune in

profits” (Mooney 2003, 18); in other words, the bill passed because the industry did not lobby

effectively. Activity continued to accelerate in the next few cycles, increasing to $28,850 in

2002, $42,000 (2004), and $76,260 (2006). Contributions could have risen as the industry

attempted to counter its declining influence once clean elections had taken hold. Or the industry

understood the threat to their bottom line only after the price control law passed.

Rather than a bolt of lightning from a clear sky, the prescription drug issue had been

percolating in the legislature for several years (Castellblanch 2003, 121). The issue became

more prominent when the Maine state employees union mobilized in response to a doubling of

their drug copays, alongside grass roots efforts and widespread public support. Despite receiving

only $250 from the industry in his two campaigns (about 0.01% of the $2.4 million he spent),

Governor Angus King threatened to veto the original legislation, and a scaled back compromise

version was passed and signed into law soon after (Castellblanch 2003, 124).

In Connecticut, a 1978 law imposed a 5¢ per bottle deposit on purchases of carbonated

beverages, chiefly soda and beer. When the bottles are returned to stores, individuals get their

deposits back, thus providing an incentive to return bottles rather than throw them out. Under

the law stores kept all deposits from all bottles not returned, an amount which by 2005 was about

$25 million annually. Environmentalists had long wanted to extend the law to noncarbonated

4 Data from the National Institute on Money in State Politics.


beverages and require retailers to transfer all unrefunded deposits to the state. Repeated efforts

to enact these changes failed, according to Common Cause, because “[c]ampaign contributions

give the beverage lobby the leverage it needs to derail any legislative effort that threatens its

bottom line” (Common Cause 2005, 10).

After the first election held with public money, a bottle bill that expanded the types of

beverages included and included the transfer provisions passed in 2009. Viewed through a naïve

lens, the change is plausibly related to the implementation of clean elections and the number of

legislators who participated. Contributions from affected industries – liquor stores, grocers,

beverage companies – declined in the 2008 cycle, as public funds comprised 76% of

contributions to legislative candidates. Private contributions to legislative candidates declined

from $9.3 million in 2006 to $2.7 million in 2008, a 71% drop. At the same time, it seems

equally plausible that the changes were due to a more complex mix of factors, particularly the

prospect of obtaining millions of dollars each year for the treasury at a time when the state

budget was under significant pressure; Republican Governor Jody Rell was pushing for the bottle

deposit revenues as part of a deficit reduction plan. In addition, Democrats had their largest

legislative majorities in decades. Their 114-37 edge in the House was the largest since 1976, up

seven seats from the previous session. Powell’s (2012, 150-154) study of the influence of money

on 100 state legislative chambers ranked the Connecticut Senate at the low end of the scale (8th

from the bottom, where lower rankings indicate that money has less influence), while the House

was well below the median (ranked 33rd from the bottom), suggesting that the failure to change

the law before 2009 was due to something other than campaign contributions and lobbying from

the affected industries.

Clean elections laws certainly could have contributed to the passage of Maine’s drug

price control law or Connecticut’s bottle law. But in order accept that conclusion, we have to

answer some preliminary questions about the influence of campaign contributors. In Maine,

legislators are part time, lack any appreciable staff support, and at the time spent an average of a

few thousand dollars per campaign. In such a system, it’s not clear why candidates would be at

all susceptible to the influence of small contributions, though party leaders may have much more

sway. In Connecticut, arguments about the effect of clean elections on the bottle bill must

consider the importance of a Republican Governor’s support, budget pressure, and legislative


inertia that could explain the inability to enact reforms earlier. None of this proves that public

funding was not a reason why policy changed, only that its effects were at most one part of a

more complicated story.

The literature on policy change and diffusion shows that most significant changes involve

a complex amalgam of factors: policy streams, issue entrepreneurs, diffusion, interest groups and

lobbying, mobilization, public opinion, path dependency, institutional capacity, bureaucratic

politics (see Weimer and Vining 2011, chapter 11). Campaign contributions may play a role in

this process, but are likely (at most) only one piece of a much more complicated puzzle.

Powell’s study of legislator perceptions of the influence of money found support for an

“investment model” of campaign contributions, in which interest groups give money in ways that

protect and advance their interests. Money may not affect specific votes, but it can shape

legislator priorities among some (though not all) incumbents (2012 202-3). Still, the effects are

modest at best, difficult to measure with much precision, and depend critically on institutional

structures and rules. As Baumgartner et al. (2009, 214) put it in their study of lobbying and

policy change: “Money matters in politics, there is no question. But other things matter as well,

and the direct correlation between money and outcomes that so many political scientists have

sought is simply not there.”

There are several possible reasons why the relationship between public funding and

outcomes might not be clearer. One is that private money does not affect specific policies in the

manner that advocates (and critics) claim, so that removing it from the system does not change

much. A second is that public funding has had an effect, but we still lack the appropriate

methods to measure it. A third is that the new rules have changed the system, but that

participants (both elected officials and interest groups) adapt in ways that protect their interests,

resulting in a blunting of the overall effects of the changes. Further investigations will need

more evidence to sort through these competing explanations.

The connection between policy results and public funding remains an open question.

What is notable about the lack of unambiguous evidence is that the adoption of clean elections

appears not to have changed the underlying difficulties in studying the influence of money on the

political process. Even with a substantial number of incumbents in several states who have not

taken any interest group contributions in the previous few cycles, it is still unclear whether


policies have changed much at all, or if they have whether those changes are due to the new

campaign finance rules or other causal factors.

Public Funding and Participation

The weakness of any clear relationship between public funding and either electoral

competitiveness or policy outcomes suggest that scholars should look elsewhere for evidence of

effects. (This presumes, of course, that we accept the plausible premise that such a significant

alteration in the system should produce some change.)

Studies of the overall response to public funding show that the laws have little effect on

either public attitudes or behavior. Polling shows that while people often approve of the idea of

public election funding in principle (Weissman and Hassan 2011). But these views are likely an

artifact of public disillusionment with politics in general and support for just about any policy

intended to reduce special interest influence. Other studies have found little relationship between

campaign finance reforms – including public funding and clean elections – and public

confidence in government (Milyo 2012; Miller and Panagopoulos 2011). A 2010 GAO study

found that many people in Arizona and Maine were just as likely to say that special interest in

government had gone up since the clean elections law had passed than to say it had gone down

(GAO 2010, 72). A major reason for the lack of any clear relationship is that many people are

not even aware of their state’s campaign finance rules. An earlier GAO review of the recently

enacted clean elections laws in Arizona and Maine found that in 2002, 60% of Maine and 37%

of Arizona voting age citizens knew “nothing at all” about the clean elections laws that had just

gone into effect amid a surge of press coverage (GAO 2003, 71).

Participation in the $3 federal income tax check off, which funds the presidential public

funding program, has declined to historic low levels: in 2012, only 5.1% of filers checked the

box (which does not increase one’s taxes), down from 28.7% in 1980, and less than half the rate

in 2006.5 Public funding advocates frequently argue that public funding (and clean elections)

encourages people to vote, though there is no evidence of such an effect in the U.S. Some work

5 Federal Election Commission, Presidential Fund Income Tax Check-Off Status1992-2012, September 2012. 2012

figures are through July, though that does not affect the percentage of filers who participate. http://www.fec.gov/press/bkgnd/pres_cf/PresidentialFundStatus_September2012.pdf


has even demonstrated that clean elections has actually reduced turnout (Milyo, Primo, and

Jacobsmeier 2011).

Most of the civic benefits of public funding have, we can safely say, been oversold, with

no discernible effect on turnout, perceptions of efficacy, or confidence in the political process.

However, there is one area where public funding has a material effect: it alters the

relationship between candidates and voters. One effect is obvious: clean elections candidates

spend very little time fundraising once they have qualified for public funds (Francia and

Herrnson 2003), and more time on other forms of voter contact and public engagement (Miller

2011).

More recent work shows that contribution matching programs that match small private

donations with public funds, often in multiples, alter the way that candidates raise money and

changes the donor pool. The largest and most established program is in New York City.

Between 1989 and 1997, contributions up to $1,000 were matched 1:1 with public funds, up to a

ceiling of 50% of a spending limit applicable to participating candidates. In 2001, this changed

to a 4:1 match for contributions up to $250, and in 2009 it changed to a 6:1 match for

contributions up to $175.

Analysis of donation patterns under contribution matching programs has shown a strong

effect on how candidates raise money, and on who donates. The logic is straightforward: with

New York City’s 6 to 1 contribution match, a $175 contribution is worth $1,225 to a candidate

(the initial $175 plus a $1,050 match). Small contributors become far more valuable, and

candidates have an incentive to raise money from people they might otherwise overlook.

The results are striking. Not only do participating candidates raise a larger share of their

money from small donors, they raise money from a broader and more diverse pool of

contributors. Malbin et al. (2012) found that compared to their privately funded counterparts,

publicly funded candidates raised more money from areas of the city with lower income and

higher minority concentrations. They conclude:

There can be little doubt that bringing more small donors into the system in New

York City equates to a greater diversity in neighborhood experience in the donor

pool. Increasing the number of small donors has been more than a means to dilute


the power of the major givers. It has also led candidates to reach out to and

engage a more representative set of constituents as they raise their campaign

funds (2012, 13).

Expanding the donor pool is a net positive, particularly since contributing money is a

form of political participation that should result in additional forms of engagement (Schmitt

2007). Whether this broader participation has other effects on the political system – particularly

with respect to the possible impact on who gets elected and what candidates do once in office –

is a harder question to analyze, but important nonetheless.

The Future of Public Funding Programs

The adoption of “clean elections” in Maine in 1996 and Arizona in 1998 encouraged

reform advocates, many of whom anticipated that public funding programs would spread across

the country. That has not happened, and some areas have scaled back or eliminated their public

funding programs. Portland, OR rescinded its clean elections program in 2010 via a citywide

referendum. Wisconsin abandoned its system of fixed grants to participating candidates in 2011,

although the program had been moribund for decades as a result of paltry grant amounts. In

Minnesota, the Governor suspended the budget for the state’s contribution refund program in

2009, although the legislature reestablished the program beginning in July 2013. The public

funding system for U.S. presidential elections is not officially dead, but it is unlikely to have any

noticeable effect on future campaigns. With spending limits that are dropping to one-fifth of

what front-runners have spent in recent cycles, future participation will be limited to fringe

candidates and also-rans.6

6 In 2012, the presidential primary spending limit was $45.6 million, and the general limit was $91.2 million (a total of $136.8 million). Over the campaign, Romney spent an estimated $467 million; Obama spent $726 million even though he did not face any primary challenge. Obama spent $196 million in October 2012, nearly 50% more than he would have been permitted to spend in all of 2012 if he had taken public funds.


In 2011, the Supreme Court’s rejected spending triggers7 for the award of additional

public grants to Clean Elections candidates. In Arizona Free Enterprise Club PAC et al. v.

Bennett et al. 564 U.S. ____2011), the Court held that spending triggers violated the First

Amendment because they were intended to level the electoral playing field and penalized

independent groups and privately funded candidates for exercising their First Amendment rights.

This has halted momentum for further expansion of Clean Elections programs, and could result

in the eventual demise of the programs already in place if candidates are less inclined to

participate.

The end of matching funds based on spending triggers has reduced participation in clean

elections programs, though not uniformly. Arizona stopped awarding them in 2010 under a court

injunction, while Maine and Connecticut stopped in 2012. In Arizona, 103 general election

legislative candidates took public funds in 2008 (including 31 incumbents), the last year of

triggered matching fund availability. In 2010, this dropped to 76 candidates (including 16

incumbents), and to 51 candidates (and 1 incumbent) in 2012. 8 This is the lowest level of

participation since the program’s beginning in 2000. Similarly, participation dropped in Maine

in 2012 to 242 general election candidates, down from 295 in 2010 and 303 in 2008.9 In

Connecticut, however, participation rose in 2012 with 257 general election legislative candidates

receiving grants, up from 240 in 2010 and 235 in 2008.10 The drops in Arizona and Maine

certainly suggest that candidates, especially incumbents, find clean elections less attractive

without the prospect of matching funds that could keep them competitive. But the increase in

Connecticut shows that factors beside the strictly utilitarian play a role in decisions to accept or

not.

Critics of public funding welcomed Arizona Free Enterprise Club PAC as a step towards

getting rid of such programs altogether. Their position is that public funding is harmful to free

speech rights, and that any policy effects are simply the result of reformers using government to

7 Once a privately funded candidate exceeded specified spending thresholds, raised money in excess of these thresholds, or benefitted from any independent expenditures, publicly funded opponents became eligible for additional grants to offset this private spending. 8 Data from Citizens Clean Elections Commission, http://www.azcleanelections.gov/election-data/search.aspx 9 http://www.maine.gov/ethics/pdf/Overview2000-2012forAppropriations02262013.pdf 10 2008 and 2010 figures from State Elections Enforcement Commission (2011, 21); 2012 figures from author’s

calculations.


put its thumb on the scale to produce outcomes more to their liking (Gora 2010; Samples 2005;

Smith 1996).

No matter what happens in the short term with the various forms of public funding, we

will surely see such programs ebb and flow with the ongoing political disputes over influence,

corruption, and equality. Disputes over campaign finance are ultimately proxies for broader

controversies about who exercises political influence. Whether public election funding is a good

or bad policy is a broader question than whether it has an effect on particular outcomes or

processes. It is not my intent to cover the normative arguments about public funding. But

whatever one’s initial position, assessments should rely on a firm empirical foundation that can

distinguish what actually occurs under such programs (and what doesn’t appear to occur), rather

than on conjecturee.


Table 1. State Level Candidate Public Financing Programs

State Candidates Eligible Type of Program Full/Partial

Funding

Arizona All statewide offices

Legislature "Clean Elections" Full

Connecticut All statewide offices


Florida Governor

Cabinet members

Contribution Matching

Grants Partial

Hawaii

Governor

Lt. Governor

Legislature

Off. Hawaiian Affairs

Fixed Grants Partial

Maine Governor


Maryland Governor

Lt. Governor

Contribution Matching

Grants Partial

Massachusetts All statewide offices Contribution Matching

grants Partial

Michigan Governor Contribution Matching

Grants & Fixed Subsidy Partial

Minnesota All statewide offices

Legislature Fixed Subsidy Partial

New Jersey Governor Contribution Matching

Grants Partial

New Mexico Public Regulation Commission

Statewide judicial offices "Clean Elections" Full

North Carolina

Judicial offices

Auditor

Superintendent of Public

Instruction

Insurance Commissioner

"Clean Elections" Full

Rhode Island All statewide offices Contribution Matching

Grants Partial

Vermont Governor

Lt. Governor "Clean Elections" Full

West Virginia State Supreme Court (pilot

program in 2012) "Clean Elections" Full

Source: National Conference of State Legislatures, 2013; Hawaii modified by author.


0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Pe

rce

nta

ge

of

Incu

mb

en

ts

Competition Levels - CT State House Elections

Reelection

Major Party Opposition

Competitive


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Public Election Funding: An Assessment of What We Would ... · Public Election Funding: An Assessment of What We Would Like to Know Kenneth R. Mayer Department of Political Science