Quarterly Journal of Political Science > Vol 5 > Issue 3

Is Private Campaign Finance a Good Thing? Estimates of the Potential Informational Benefits

Andrea Prat, Department of Economics and STICERD, London School of Economics, a.prat@lse.ac.uk , Riccardo Puglisi, Dipartimento di Economia Pubblica and LdA, Università degli Studi di Pavia, riccardo.puglisi@gmail.com , James M. Snyder Jr., Departments of Political Science and Economics and NBER, Massachusetts Institute of Technology, millett@mit.edu
Suggested Citation
Andrea Prat, Riccardo Puglisi and James M. Snyder Jr. (2010), "Is Private Campaign Finance a Good Thing? Estimates of the Potential Informational Benefits", Quarterly Journal of Political Science: Vol. 5: No. 3, pp 291-318. http://dx.doi.org/10.1561/100.00008081

Publication Date: 16 Dec 2010
© 2010 A. Prat, R. Puglisi and J. M. Snyder, Jr.
Campaign finance,  Democracy


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In this article:
Discussion and Conclusions 
Appendix 1: A Model of Voter Inference from Campaign Finance 


What would happen if the current U.S. campaign finance system, mostly based on private donations, were replaced by a public funding scheme of the same magnitude? Some argue that public funding would deprive voters of useful information, but this can only be true if private donations are somehow targeted to "better" candidates. In this paper, we ask what voters can learn about the "effectiveness" of a legislator from the amount and pattern of contributions received during the campaign. We find that the total amount that a candidate receives is a positive, but weak, predictor of that candidate's effectiveness. Small contributions provide a strong and positive signal of effectiveness, while large contributions are a negative signal of effectiveness. Contributions from organizations also provide a positive signal, while contributions from individuals, parties, and candidates themselves do not.