Matching Funds in Public Campaign Finance

Tilman Klumpp (), Hugo Mialon () and Michael Williams ()

No 2012-20, Working Papers from University of Alberta, Department of Economics

Abstract: Matching provisions in state clean elections acts have been ruled unconstitutional by the U.S. Supreme Court on First Amendment grounds (Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, 2011). By modeling political speech as a costly advertising activity in an electoral contest, we show that matching funds can indeed decrease speech by privately funded candidates. Moreover, the state can undo any restrictions on matching programs imposed by courts, and replicate the equilibria under a matching program, by adopting an appropriately chosen lumpsum funding scheme. We also evaluate the validity of two specific arguments made by the Supreme Court in its Arizona decision, finding that one is incorrect and one is correct within the context of our model. Lastly, we provide preliminary evidence that the Arizona ruling has in fact increased private spending and increased the number of candidates per election race.

Keywords: public campaign finance; matching funds; trigger funds; clean elections (search for similar items in EconPapers)
JEL-codes: D72 H41 H71 H76 K19 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2012-08-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2012_020

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