Funding of Political Parties with Electoral Cheques

• Autores: Anaís Tarragó
• Localización: Abstracts of the Fifth Spanish Meeting on Game Theory and Applications / coord. por Jesús Mario Bilbao Arrese , Francisco Ramón Fernández García , 2002, ISBN 84-472-0733-1, pág. 44
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • The funding of political parties and, in particular, of electoral campaigns is becoming an important political issue for public opinion in all democracies.

    There exists the belief that the funding system of political parties does not favor the equality of opportunities of all the voters, in the sense that those with a better economic position in society may have a greater capacity to influence politicians. The funding system of political parties is not the same in all countries. There are some countries where the major part of the funds are public and are related to the number of votes or seats obtained in the election (this is the situation of most European countries), and there are some others where the biggest part of funds comes from individual contributions of voters, firms or interest groups (this is the case of the United States). It is true that funding of political parties is not a new issue, nevertheless in our approach we will try to analyze an issue that has not been studied before: the so called �Economic Democracy�, that is, that each voter�s ballot had the same influence in the political process no matter her economic resources.

    As we have said, there exists the opinion that some funding systems of parties favor those who have more money, since they can �buy� favors from politicians. Assuming that money is a very important element for the survival and reaching of power of the political parties (a very important part of the parties� budget is dedicated to finance the electoral campaign), these fight to attract the greatest number of contributions. These contributions are, of course, not for free, they are in exchange of the catering of the contributors� interests.

    Given that the private funding of parties is an important phenomenon in the United States, our paper will focus on the situation in that country. Even though, we would like to extend our proposal to other democracies. In the United States the private contributions come mainly from voters, corporations, PACs and interest groups. Some authors claim that PAC contributions are not as important as they are thought to be. On the other hand, campaign contributions from PACs are often portrayed in the media as the functional equivalent of bribes. Hence, some authors have claimed that corporate PAC contributions buy legislature. It is not a surprise then, that a recent opinion poll by the Center of Responsive Politics. Therefore, the idea that a reform is needed is wide extended. Generally, campaign reform plans either seek to �level-up�, by increasing the ability of those shut out of the political system to participate, or to �level-down� , by decreasing the ability of those with disproportionate political capital to exercise greater influence over the political system. A voluntary public financing system, which allows candidates either to accept public funds or solicit private contributions, is a classic level-up program;

    it amplifies the voice of the poor but does not limit the influence of the rich. A law limiting the amount that individuals or PACs can contribute to a candidate is a classic level-down program. One of the first reform proposals came from Senator McCain and Senator Feingold who proposed to set some limits on the contributions given to the parties, candidates and Congressmen. From this starting point, there have been several proposals to reform the funding system of political parties in the United States such as Donnelly, Fine and Miller (1999), Ackerman, Pollett and Phelps. The State of Maine has carried out a reform based on the establishment of limits to private contributions as a previous step to a complete public system of funding similar to the European one. Other states, like Arkansas, have gone a little bit further and have reformed the funding system in such a way that are the voters who make the contributions to parties via taxes (Pollet (1999), Phelps (1999)).

    The model presented here is based on the idea of Bruce Ackerman (1999) and Richard Hasen (1998). The dissatisfaction with the current system of funding provides an opening for the true political reform, but, what type of reform is best? This paper argues for a new system of campaign finance that should appeal to those on the left and the right: a plan for mandatory campaign finance vouchers (or also called Patriot Money) that supplants rather than supplements, the current campaign finance system in the U.S. Under this plan, each voter would have the opportunity to contribute vouchers to candidates or to interest groups in every federal or local election cycle. The interest group would use the vouchers to contribute to candidates or to organize independent expenditures campaigns. Only funds from the voucher system could be spent to support or oppose candidates for elected offices. The voucher plan will replace the plutocratic campaign finance system with a system driven by the intensity of voter support for candidates, their causes and ideologies. The plan does not depend upon utopian hopes that politics can become less self-regarding or more altruistic; instead, it reforms the political market with proper incentives. The legal detail of this type of reform have already been questioned and analyzed by the authors previously mentioned (Hasen (1996)). Then, our research does not question the viability of the plan, but focuses on the effects of the reform on the political process. The voucher plan proposed by Bruce Ackerman and Richard Hasen is a financing system that both levels-up and levels-down. The plan levels -up in the sense that all voters, even those who never made campaign contributions before, are given vouchers to contribute to candidates for office.

    Vouchers facilitate the representation of groups which lack a voice in the current system. In this sense, the proposed plan favors the appearance of new interest groups. But these vouchers also level down by prohibiting all other sources of campaign money; the rich can no longer exercise greater influence through private contributions and independent expenditures.

    Our proposal will be modeled in the framework of political competition and for that we will follow the most important literature in this field and also the literature on funding of political parties. We will follow basically the model proposed by Grossman and Helpman (1996). Voters will be à la Baron (1994) in the sense that there are some informed and some uninformed voters. There will be a proportion of voters that are informed about the proposals and ideologies of the parties and the rest of voters who are not. The latter are the parties� objective: the uninformed or impressionable voters are those who have no prior opinion about politics (see Zaller (1999)). They are susceptible to electioneering activities like campaign propaganda. Their vote does not depend on the policies supported by the parties rather on the political campaign that each party carries out. Regarding the electoral campaigns, these can be seen both in the role of persuasive and informative. Persuasive campaigns allow those parties with more funds to obtain more votes from impressionable voters. That is, money �buys� votes. On the other hand, informative campaigns inform those voters who did not have previous information about the parties� proposals. In this case, those parties who are more efficient in transmitting information (or have a better information technology) will obtain more votes (Ortuño-Ortín and Schultz (2000)). In our model the campaigns will be persuasive. That is, more money, more votes.

    The new issue in our model is the fact that voters receive vouchers from an institution and that they have to allocate them to any of the agents in the political process. Moreover we also introduce the possibility that voters form interest groups. Hence, the formation of lobbies is endogenous. We will model this part following the literature on endogenous formation of institutions and groups (Baron(1993), Caplin and Nalebuff (1997), Marhuenda and Ortuño-Ortín (2001) ) and on party activism (Aldrich (1983a,1983b). We will see how the interest groups and the voters behave and what are the effects on the political process. Considering the fact that both parties are, ex-ante, equally popular we find that an interest group will always form and that it will never have more than one half of the population. At the same time, we can also see that the interest group will always be radical. This last result makes sense with the popular idea that interest groups cluster the most extremist individuals in a society. On the other hand, when we study the situation with two interest groups we find that interest groups are horizontal and that, if there is no possibility of exclusion, the lobby�s members will always be one half of the informed voters.