By Jay Mandle,Co-Founder of Democracy Matters and W. Bradford Wiley Professor of Economics,
Please do not cite or quote without the permission of the author.
Money and Votes
In an electoral democracy, politics depends upon money and votes. But in the absence of public financing of electoral efforts, attracting voters requires raising private funds. Only politicians who are well-funded from private sources can secure office. What this means is that voters are presented with candidates who either themselves are wealthy and finance their own campaigns, or are acceptable to private funders. Candidates who might be attractive to voters, but who cannot secure the funding necessary for their electoral efforts, are effectively shut out of the political process.
It follows that, with private funding, the scope of democratic choice is narrowed. The only policy options that make it to the legislative agenda are those that lie within bounds of acceptability set by funders. Public policy is thereby biased to the interests of the wealthy.
Furthermore this bias is self-reinforcing since its impact is to reduce voter participation. Potential voters who, upon examining the content of political platforms do not see their views expressed by any of the contestants, are unlikely to be strongly motivated to vote. Non-participation, whether rooted in this source or some other more purposeful barrier, reinforces the already existing bias towards the interests of those who provide private political funding. The pressure politicians might feel to expand the policy agenda to accommodate the views of a broad electorate is attenuated when voter participation is low.
The specific form this narrowing takes is a reduction in public policy support for non-wealthy families and individuals. As reported in a survey of the American electorate undertaken by the
Empirical Analysis
My argument is that causality in politics starts with the way politicians finance their campaigns. This system directly affects the policy agenda by reducing both the range of candidates and voter participation. These two in combination mean that policies emerging from the political process are biased toward the interests of the donor class. Government expenditures for non-elites in society will be lower than would be the case in a political setting in which public funds were used to finance politics.
Before this line of reasoning can be considered valid, its predictions should be empirically assessed. Its confirmation requires that a pattern exists in which countries which publicly finance their candidates have both higher voter turnout rates and more public expenditures for what the World Bank describes as “enhanced security,” and which I will refer to as “personal security” than do countries that depend on private donations to political office seekers. Such a finding would tend to confirm the importance of private wealth in shaping both the content of politics and its attractiveness to non-elite voting participation.
To test this hypothesis I have collected data for fifteen comparably developed electoral democracies and grouped them according to the way they finance their political campaigns. In the first category the
In addition to this information on the form of public support for political efforts, I have provided data on voter turnout rates and government expenditures for “personal security.” The voter turnout rate is defined as the total vote in elections to national assemblies during the 1990s as a percentage of the voting age population. The measure of “personal security” is obtained by adding together public expenditures for education, health, and pensions. For each country, I computed these as a percentage of their GDP and then added the three together to obtain a measure of expenditures made to enhance “personal security.”
The specific issue at hand is whether it is true that the existence and form of public funding of politics is related to voter turnout rates and whether, in turn, those two measures are positively associated with levels of expenditures for “personal security.” If both turn out to be the case, such a pattern will provide support for the hypothesis that a privately funded political process biases policy-making.
Table 1 represents a summary of this information. The pattern that emerges provides strong support for the hypothesis. It can be seen that public financing of elections is associated with high voter turnout rates. It also is the case that the presence of both public financing and high voter turnout rates is associated with an increased provision of “personal security.” In general, the table supports the view that private funding of politics skews its policy outcomes. The countries with the least public funding of politics and lowest turnout rates are the ones with the lowest share of GDP devoted to “personal security” in the form of education, health and pensions.
What these data also suggest, however, is that in addition to its simple existence, the form that the public political subsidy takes, is important. Though the voter turnout rate is relatively high in the countries that support campaigns and media but not parties (
Table 1
Voter Turnout Rates and “Personal Security” as Percentage of GDP for Countries Grouped by Kind of Public Support for Politics
(1) Compulsory voting is strictly enforced in
(2) Compulsory voting is strictly enforced in
Source: Computed from data in Appendix Tables A and B.
Analysis
The discovery of this pattern does not definitively prove that adopting generous health, education and pension programs is caused by government grants to candidates and parties. Causality, in principle, could work in the reverse direction. Perhaps the public funding of politics and the provision of “personal security” were both part of a common ideological package that emphasized the role of the public sector in advancing well-being. If this were the case the public funding of elections should not be treated as an independent or causal variable as I have done, but rather it should be seen as dependent. It did not cause an expanded government sector: rather, it was part of that expansion, an expansion that was caused by some other causal agent. Furthermore in this alternative interpretation, the high voter turnout rates associated with public funding is not causal but is instead a response to the favorable treatment accorded to the population by the government. High voter turnout rates in such an explanation might reflect the fact that the population is not alienated from government, but responds favorably to it and is supportive of it.
This alternative view has merit. Most of the countries in which public funding of electoral politics is present and where “personal security” expenditures are at high levels do possess a long history of social democratic political activism. This tradition undoubtedly means that the people there have been more supportive of an extensive role for government in providing social services than in countries such as the
Even if it is acknowledged that the adoption of public financing of elections is itself dependent upon a prior-existing political culture, there nevertheless is a strong argument for seeing campaign finance reform as causal with regard to social support programs. Otherwise it would be necessary to maintain that political funders impose no bias on candidates and policies. Their outlays would be made with no expectation of reciprocity. Private patrons, in this perspective, are disinterested when they provide resources to politicians. A more reasonable argument would acknowledge that private money does have an impact on the shape of politics, but that is not necessarily the end of the story. A strong political culture promoting an extensive public sector, in a electoral democracy, can counterbalance the biases produced by wealth. That is, political activism in the promotion of public financing of parties and candidates can overcome entrenched interests.
The circumstances in which public funding in politics was adopted seem to support this view of the relationship between bias on one hand and activism on the other. Much of the motivation for instituting public financing was to overcome the bias of politics figured centrally. As recounted by Nassmacher,
In Western democracies private sponsorship used to be the traditional way of funding political activity. Until the 1950s granting taxpayers’ money to political parties was virtually unknown. Since then there has been a dramatic spread of public subsidies to parties…Political corruption in party fundraising and unequal opportunities in party competition have contributed to the proliferation of public subsidies.
Levush agrees, she writes:
Lack of sufficient means puts the party or the candidate at a clear disadvantage. This is the rationale behind the policy of almost all countries surveyed to provide special subsidies to candidates or to parties.
Public funding, in short, was intended to increase the influence of middle and low income people in politics at the expense of the wealthy. With that the case, elected officials became more likely to legislate in support of the needs of their constituents and less likely to undertake policies benefiting the affluent. Where this occurred, public outlays on “private security” received enhanced political attention.
Not to be overlooked in all of this, of course, is the fact that the United States stands alone compared to the countries considered here in not providing any support at all for candidates to the national legislature, and ranks lowest in voter turnout rates. Predictably, this country ranks near the bottom with regard to the providing of “personal security.” Countries with public political funding and higher voter turnout rates than the
Change
The experience to date in this country is that a “good governance” movement is too small to offset the power of wealth and correct these dismal outcomes. Appeals to fairness and democracy, disconnected from other concerns, have not proved to be sufficiently energizing to spur widespread grassroots activism. Successfully mobilizing such an effort instead will require relating public funding of campaigns to other issues about which people care deeply. A powerful movement to democratize the political system will be born only when large numbers of people believe that their own interests are advanced by a political system of greater equality.
This analysis suggests that campaign finance reform should be presented as an empowerment issue. By providing enhanced access to decision-making for the majority of citizens, the public funding of elections has the potential to alter the present upper class bias of government policy. Such a change in the political funding system would better equip those who are now underrepresented in and therefore underserved by the political system with additional tools to advance their interests. With that, increased government spending on public education, health and pensions might well be adopted thereby advancing the well-being of a large cross-section of the population.
Armed with these insights, it might be possible to develop a new strategy for campaign finance reform, one that explicitly attempts widen the base of supporters by pointing to the likely benefits that would be placed on the political agenda as a result of political reform and subsidies. These findings make credible the claim that politics can serve the people, but only when office holders are not dependent upon wealthy patrons.
It has been a long time since the middle and lower income strata of society saw government as an ally. Politics for many Americans is hostile territory. Avoidance and cynicism is their not unreasonable response to the current system. But that reaction precisely is self-defeating: it leaves government responsive to the small group of people who fund politics but whose interests diverge from those of the majority.
The public financing of elections then, should be promoted not just as a greater approximation to abstract norms and principles of democracy. It also is a vehicle for the majority of the population to find its political voice. The public sector is an agency that can deliver benefits to people. But it requires democracy to ensure that those who need the benefits it can bestow receive them. If grassroots pressure is not mobilized, it is certain that the wealthy will not voluntarily cede their dominance of the political process.
All politics requires money. Whose money – that of the privately wealthy or the shared wealth of the nation – is used to finance politics goes far to determine the beneficiaries of government policy. A social movement for public financing of elections might achieve not only a more egalitarian structure to politics. The result could also be a society in which support and opportunities are made more available than at present.
Such a vision – one in which the political system can be made to work to the advantage of most of the people – is necessary if democratic renewal is to be achieved. While deepening democracy cannot be achieved without a popular mobilization, such a mobilization is not likely so long as people believe that politics is an instrument of the rich. The disinterest and apathy that the United States political system currently engenders – symbolized but not limited to the scandalously low voter turnout that prevails in this country – has to be overcome if we are to democratize the political system. The people in the country might reengage in politics if they are offered a plausible conception of what politics can accomplish for them.
Appendix
Table A
Voter Turn Out Rate and “Personal Security” as % GDP for Countries Grouped by Kind of Public Subsidies for Politics
(1) Compulsory voting strictly enforced.
Sources: Countries grouped according to The Center for a New Democracy & The Center for Responsive Politics, The World of Campaign Finance, Table 1; Voter Turn Out Rates, International Institute for Democracy and Electoral Assistance, http://www.idea.int/vt/country_view.cfm, accessed, 8/8/03; “Personal Security” as per cent of GDP, summation of Public Expenditures on Pensions as percent of GDP, Public Expenditures on Health as percent of GDP and Public Expenditures on education as percent of GDP, World Bank, World Development Indicators 2003, Table 2.10
Table B
Public Spending on Health, Education and Pensions, 1997
(1) data for 1993
Source: The World Bank, World Development Indicators 2003, Table 2.10.