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Can we boost small donors' participation in elections? Should we?

- May 22, 2014
(Andrew Harrer/Bloomberg)

Last week, I wrote a post here describing most forms of campaign finance regulation as futile, noting that setting caps on donations tends to a) not reduce the amount of money in campaigns, but b) increase the difficulty of tracking the flow of money. Then on Monday, Rep. John Sarbanes of Maryland wrote a response piece, explaining his proposed Government by the People Act. This act would offer Americans a $25 tax credit to use as campaign donations; the donations would be matched at a 6:1 ratio. The idea is to encourage smaller donors to be more involved in the financing of elections and take some influence away from the very wealthy donors currently backing candidates.

I’m a bit less bleak on this version of campaign finance reform, since it notably doesn’t prohibit contributions, which is usually where we run into trouble. But is it possible to incentivize Americans who don’t typically donate to campaigns to actually do so?
As it turns out, some states have attempted similar forms of incentive programs. Between 1992 and 2009, Minnesota ran a Political Contribution Refund (PCR) program, under which the state would return the first $50 individual Minnesotans donated to state legislative candidates. A study by Graham Ramsden and Patrick Donnay found that the PCR program had some positive, while modest, effects, encouraging people to donate to state legislative candidates and increasing those candidates’ reliance on smaller donations. (Interestingly, though, Michael Miller and Michael Bath found that candidates became no less reliant on small donors after the program was terminated in 2009.) Thomas Cmar surveyed some small donor incentive programs in other states and found that they can help boost small donor participation, but typically only when the state and campaigns are active in encouraging such donations and making potential donors aware of the incentives.
These findings offer some evidence that a reform like Sarbanes’ could actually boost small donors’ participation in campaigns. So let’s say that it did have that effect. How might that change politics?
Adam Bonica’s research offers some suggestions. He has found that small donors actually tend to be more polarized than major donors. To the extent that donors can influence the behavior of officeholders (and that evidence is pretty limited), an increased presence of small donors may tend to encourage greater polarization.
That said, past behavior doesn’t necessarily predict future results here. The people who currently donate small amounts of money to congressional campaigns might not be the same as those who’d be incentivized to participate under Sarbanes’s tax credit proposal. Also, as Bonica notes, a great deal of small donations tend to be made out-of-state, with moderately-attentive citizens hearing about particularly controversial (and highly partisan) candidates via national news sources. It might be possible to limit the matching fund program to just within-district donations, although it’s far from clear what kind of effect that would have on politics.
It may well be possible to boost the influence of small donors in elections. But it surely warrants a bit of discussion to consider just what changes that might produce.