Does Public Campaign Funding Crowd Out Private Donation Activity? Evidence from Seattle's Democracy Voucher Program

Alan Griffith and Thomas Noonen

No 9wtzs, SocArXiv from Center for Open Science

Abstract: During each election cycle, the city of Seattle distributes four \$25 vouchers to every registered voter, which may be donated to and redeemed by campaigns for city office. Through a difference-in-differences research design, we study the causal effect of Seattle's program on various outcomes in city council elections in the first two cycles after implementation, with two comparison groups drawn from other cities in Washington and California. We find that the program led to an approximately 62-100% increase in total contributions and a 400% increase in number of unique donors. The effects on dollars and donors are entirely driven by small donors, defined as those who contribute less than $200 to a campaign. We find statistically insignificant evidence of decreases in private donations, although our point estimates suggest moderate-to-substantial crowd-out ratios. We further show that the program led to a 76-86% increase in candidates for city council. These results provide some of the first causal evidence on the effect of decentralized public campaign finance schemes, while also speaking to broader questions measuring the effects of money in politics, campaign regulation, and the effects of public funds on private giving.

Date: 2021-04-21
New Economics Papers: this item is included in nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:9wtzs

DOI: 10.31219/osf.io/9wtzs

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