Small Donor Empowerment Depends on the Details: Comparing Matching Fund Programs in New York and Los Angeles

Abstract

Abstract Political campaigns have long been financed by people with well above average incomes, but the balance has tilted dramatically since the Supreme Court’s 2010 decision in Citizens United v. FEC. A number of jurisdictions have been looking to rebalance the incentives through new (or updated) public financing programs. Much of the discussion about their potential effects, however, has been sweepingly generic. But we know that these programs do differ from each other and have good reason to expect that “success” or “failure” will depend both on their goals and the programs’ details. This article focuses on one type of program that has become a model in recent years. Until recently New York City was the only jurisdiction with a multiple matching system explicitly designed to increase the role of small donors.Previous studies noted apparent successes, but it has been difficult to feel comfortable with only one jurisdiction to test. After Los Angeles revised its system in 2013, serious comparisons became possible. This article finds that New York City’s campaign finance matching fund program increased the number, proportional role, and diversity of small donors in city council elections but that the Los Angeles program was substantially less effective. The findings were confirmed through a difference-in-differences procedure that tested each city council over time against state legislative districts representing the same geographical space. A series of explanations relating to the programs’ details were tested, leading us to conclude that the policy details were affecting the results. The results were also different in both cities for mayoral and city council candidates. This suggests alterations may be needed if one were to consider the model for offices with larger constituencies, such as Governor or the US Congress. Finally, the article concludes with a discussion of major arguments for and against increasing small donor participation as a goal for public policy.