A common refrain is that there is “too much money in politics”, with many arguing for the public funding of political campaigns. But what are the effects of this kind of public finding on electoral and legislative behavior? Using evidence from U.S. state legislative elections over the past four decades, Andrew B. Hall finds that public funding for campaigns actually increases political polarization by reducing the influence of interest groups, which tend to be more moderate than individuals in the way that they donate

Hall, Andrew B.

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blo gs.lse.ac.ukhttp://blogs.lse.ac.uk/usappblog/2014/05/14/public-funding-o f-elections-increases-candidate-po larization-by-reducing-the-influence-of-moderate-donors/Public funding of elections increases candidate polarizationby reducing the influence of moderate donors.A common refrain is that there is “too much money in politics”, with many arguing for the publicfunding of political campaigns. But what are the effects of this kind of public finding on electoraland legislative behavior? Using evidence from U.S. state legislative elections over the past fourdecades, Andrew B. Hall finds that public funding for campaigns actually increases politicalpolarization by reducing the influence of interest groups, which tend to be more moderate thanindividuals in the way that they donate.In his 1907 State of  the Union address, U.S. President Theodore Roosevelt told the nationthat “there is a very radical measure which would, I believe, work a substantial improvement in our system ofconducting a campaign.”  He was ref erring to the public f unding of  polit ical campaigns, a ref orm that, morethan 100 years later, is enjoying resurgent popularity in America.  In addition to the f ederal government’sf unding of  presidential elections, f ourteen U.S. states now of f er some kind of  public f unding to candidatesf or state of f ices, and similar programs have been proposed f or the U.S. House and Senate.By looking at the ef f ects of  the public f unding of  campaigns on electoral and legislative behavior, we cannot only evaluate an important policy, but we can learn about the polit ical ef f ects of  the design of  ourelectoral institutions and enhance our theoretical understanding of  the links between campaign f inance,interest groups, and the actions of  our legislators.In recent research, I f ind that the public f unding of  state legislative elections deprives incumbents of  theirf inancial and electoral advantages but increases legislative polarization.  I present evidence that thisincrease in polarization stems, at least in part, f rom the way in which public f unding reduces the inf luenceof  access-oriented interest groups, donors who pref er more moderate candidates.To arrive at these results, I take advantage of  the staggered implementation of  public f unding programs inf ive states: Minnesota and Wisconsin, who implemented programs in the 1970s, and Arizona, Maine, andConnecticut, whose more stringent “clean election programs” are of  more recent vintage.  The programswork by providing state f unds to legislative candidates who “opt in” and obtain a small number of  qualif yingdonations f rom individuals to establish their viability. By comparing the way these states have changedaf ter implementing public f unding to how all other “control” states have changed over the same time period,I was able to disentangle how public f unding af f ects elections and legislation.Figure 1 shows my main results, and plots the distribution of  state legislative ideal points or “NP Scores”(which show levels of  polarization), estimated f rom roll-call data by Shor and McCarty f or “treated” states,those that implement public f unding programs, and “control” states, those that do not.  In the top row, wecan see how the distribution of  ideal points has become more polarized to the lef t and right af ter publicf unding, with f ewer legislators in the middle of  the spectrum and two “humps” f or the two parties.  No suchchange is seen over the same time period in the control states in the second row.Figure 1 – Changes in roll-call polarization across treated and control states:  U.S. statelegislatures, 1993- 2010Why does public f unding increase polarization?  In my research, I f ocus on one major explanation, althoughthere may be others as well.  Public f unding removes the ability of  access-oriented interest groups totarget incumbents with their contributions.  As Adam Bonica has shown, these groups tend to be moremoderate than individuals in their donation behavior.Figure 2 conf irms this relationship f or state legislatures.  The plots show the average amount of  moneydonated to candidates f rom access-oriented interest groups (in the f irst plot) and individuals (in thesecond plot) across candidate NP Scores.  The f irst plot shows that access groups display a strongpref erence f or candidates with ideological scores in the middle of  the spectrum; individuals, on the otherhand, display no such pref erence, as the second plot shows.Figure 2 – Donation patterns in state legislaturesNote: The left panel presents a kernel smoother relating candidate roll-call ideology (NPscore) to residualized total contributions from access-oriented groups (de-meaned by stateand party). The right panel presents the same for residualized total contributions fromindividuals. Because of sparsity, the graphs exclude the 4.8% of observations with NPscores less than -1.5 or greater than 1.5.This dynamic can be seen clearly if  we zoom in on Connecticut’s public f unding program.  Figure 3 plots the“ideological portf olios” of  state legislative candidates bef ore and af ter public f unding in Connecticut, usinga technique described in the paper.Figure 3 – Ideological donor portfolios of Connecticut state legislative candidates over t imeNote: Plots the average estimated ideology of donors to candidates. Each line represents acandidate’s portfolio over time. Dark, bold lines are the party averages. A value of 1 indicatesthat the candidate’s entire portfolio came from donors that only gave to Republicans; a valueof -1 indicates that the candidate’s entire port- folio came from donors that only gave toDemocrats. The vertical dotted line indicates the last election before public funding.As the plot shows, both Republicans and Democrats moved to the extremes af ter public f unding was put inplace in 2006.  In 2008, every Republican candidate in the dataset received donations only f rom donors whocontributed exclusively to Republicans, and every Democratic candidate in the dataset received donationsonly f rom donors who contributed exclusively to Democrats.  (These donations are, in almost all cases,qualif ying donations f rom individual donors who support one party exclusively.)Public f unding programs diminish the inf luence of  these moderate interest groups, who are f ree only tocontribute to candidates who do not “opt in” to public f unding.  While opt- in rates vary widely across statesand years, they are of ten high enough to wipe out interest group contributions, leaving candidates to caterto individual voters and the small number of  individual donors they must woo in order to qualif y f or publicf unds.The link I have shown between campaign f inance ref orms that limit interest group donation behavior andpolarization is consistent with other research on the topic.  In a comprehensive study of  other types ofcampaign f inance ref orm, Michael Barber has shown the same exact pattern of  polarizing ef f ects, as haveMichael Miller and Seth Masket in their early study of  public f unding (see discussion here and here).What do we make of  these f indings? From a policy perspective, the results require cautious interpretation. Although public f unding increases legislative polarization, it might improve many other f eatures of  thepolit ical system.  Perhaps the best evidence f or many of  these benef its is presented in Michael Miller ’scomprehensive study of  the subject, Subsidizing Democracy.  Among other things, the book shows thatpublicly f unded legislators have more time to dedicate to usef ul activit ies, rather than to f undraising. Voters, too, seem to become more engaged af ter public f unding is put in place.  In addition, it is possiblethat incumbents in publicly f unded legislatures are less beholden to “special interests,” although observingthis is dif f icult if  not impossible.Caution is also required because the policy implications of  the f indings f or public f unding depend on opt- inrates.  My estimates are all at the aggregate level to avoid selecting on the strategic decisions ofcandidates to opt into the program or not.  If  opt- in rates f all much—and it appears they are f alling in somestates, such as in Arizona, where participation went well below 40% in 2012—then it seems likely that theelectoral and legislative ef f ects of  public f unding I have uncovered will diminish as more and morecandidates receive more money f rom interest groups again.In some respects the broader theoretical implications of  the f indings are clearer than their policyimplications.  Access-oriented groups use campaign contributions to support incumbents.  Theircontributions f orm a large part of  incumbents’ f inancial advantage, and ref orms that prevent them f romdoing so leave incumbents worse of f , electorally.  The loss of  this f inancial support also produces morepolarized legislators, suggesting that access groups act as a buf f er against the polarized pref erences ofindividuals.What do access-oriented interest groups receive in exchange f or these contributions?  Answering thisquestion, something of  a “holy grail” f or the study of  interest groups, is vital to understanding thetradeof f s between a world with publicly f inanced elections and one in which any group is f ree to contributeto any candidate.   Whatever the answer to this question, my analysis of  public f unding programsdemonstrates the role that access-oriented groups play in supporting moderate incumbents electorally.This article is based on the working paper How The Public Funding Of Elections Increases CandidatePolarization.Featured image credit: Truthout.org (Creative Commons BY NC SA)Please read our comments policy before commenting. Note:  This article gives the views of the authors, and not the position of USApp– American Politics and Policy,nor of the London School of Economics. Shortened URL for this post: http://bit .ly/1mUjhkN _________________________________About the authorAndrew B. Hall – Harvard UniversityAndrew B. Hall is a Ph.D. candidate in the Department of  Government at Harvard Universityand an af f iliate of  the Institute f or Quantitative Social Science. Hall’s work appears in, or isf orthcoming in, the American Journal of Political Science, the Journal of Polit ics, andLegislative Studies Quarterly.  His applied research studies the links between Americanelectoral institutions and the behavior of  elected of f icials in the legislature.  For moreinf ormation, please see andrewbenjaminhall.com.  You can f ollow Andrew onTwitter @andrewbhall.CC BY-NC-ND 3.0 2014 LSE USAPP

Public funding of elections increases candidate polarization by reducing the influence of moderate donors

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