Campaign finance

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An infographic explaining American system of campaign finance, by the Sunlight Foundation

Campaign finance refers to all funds raised in order to promote candidates, political parties, or policies in elections, referendums, initiatives, party activities, and party organizations. The funds could also detract from the opponents of the above. Campaign funds is the subject heading under which all books dealing with money in politics are catalogued by the Library of Congress. Other nations use other terms for the subject and offer a broader perspective. Cross-national comparisons prefer the more comprehensive "political finance", researchers in continental Europe use "party finance". All of them deal with "the costs of democracy", a term coined by G. Alexander Heard for his famous analysis of campaign finance in the U.S.[1][page needed]

Political campaigns have many expenditures, such as the cost of travel of candidates and staff, political consulting, and/or the direct costs of communicating with voters. The types and purposes of campaign spending depends on the region. For instance, in the United Kingdom, television advertising is provided to campaigning parties for free and limited by law, while in the United States, it is one of the biggest expenses in the campaign budget, especially for statewide and national campaigns.

In the U.S. the campaign, political action committee (PAC), and super PAC are adequate terms to identify the units that raise and spend money for political purposes. For most other democracies (including the European countries, Canada, Mexico, Japan, Australia, New Zealand and Israel) the political party is a useful concept to identify and aggregate the multitude of entities that raise and spend political funds. Parties run national headquarters, constituency associations, regional branches and local chapters as well as offices in the field. Each of these units collects revenue and incurs expenses that are used to fund political competition.

When James K. Pollock [2] and Louise Overacker [3] began to analyze the role of money in politics, they started in the U.S., looking at the money that was spent in order to influence the outcome of an (federal) election. Their take-off point has dominated perception of the subject ever since.

Although the political science literature indicates that most contributors give to support parties or candidates with whom they are already in agreement,[4] there is wide public perception that donors expect illegitimate government favors in return[5] (such as specific legislation being enacted or defeated), so some have come to equate campaign finance with political corruption and bribery[citation needed]. These views have led some governments to reform fundraising sources and techniques in the hope of eliminating perceived undue influence being given to monied interests. Another tactic is for the government, rather than private individuals and organizations, to provide funding for campaigns. Democratic countries have differing regulations on what types of donations to political parties and campaigns are acceptable.

The causes and effects of campaign finance rules are studied in political science, economics, and public policy, among other disciplines.

Private financing[edit]

Some countries rely heavily on private donors to finance political campaigns. In these countries, fundraising is often a significant activity for the campaign staff and the candidate, especially in larger and more prominent campaigns. For example, one survey in the United States found that 23% of candidates for statewide office surveyed say that they spent more than half of their scheduled time raising money. Over half of all candidates surveyed spent at least 1/4 of their time on fundraising.[6] The tactics used can include direct mail solicitation, attempts to encourage supporters to contribute via the Internet, direct solicitation from the candidate, and events specifically for the purpose of fundraising, or other activities.

Most countries that rely on private donations to fund campaigns require extensive disclosure of donations, frequently including information such as the name, employer and address of donors. This is intended to allow for policing of undue donor influence by other campaigns or by good government groups, while preserving most benefits of private financing, including the right to make donations and to spend money for political speech, saving government the expense of funding campaigns, and keeping government from funding partisan speech that some citizens may find odious (see [1]). Supporters of private financing systems believe that, in addition to avoiding government limitations on speech, private financing fosters civic involvement, ensures that a diversity of views are heard, and prevents government from tilting the scales to favor those in power or with political influence.

These kind of donations can come from private individuals, as well as groups such as trade unions and for-profit corporations.

However, critics of this system claim that it leads to votes being "bought" and to large gaps between different parties in the money they have to campaign with.

Public financing[edit]

Main article: Party subsidies

Other countries choose to use government funding to run campaigns. Funding campaigns from the government budget is widespread in South America and Europe.[7] The mechanisms for this can be quite varied, ranging from direct subsidy of political parties to government matching funds for certain types of private donations (often small donations) to exemption from fees of government services (e.g. postage) and many other systems as well. Supporters of government financing generally believe that the system decreases corruption; in addition, many proponents believe that government financing promotes other values, such as civic participation or greater faith in the political process. Not all government subsidies take the form of money; some systems require campaign materials (often air time on television) to be provided at very low rates to the candidates. Critics sometimes complain of the expense of the government financing systems. Conservative and libertarian critics of the system argue that government should not subsidize political speech.[citation needed] Other critics argue that government financing, with its emphasis on equalizing money resources, merely exaggerates differences in non-monetary resources.

In many countries, such as Germany and the United States, campaigns can be funded by a combination of private and public money.

In some electoral systems, candidates who win an election or secure a minimum number of ballots are allowed to apply for a rebate to the government. The candidate submits an audited report of the campaign expenses and the government issues a rebate to the candidate, subject to some caps such as the number of votes cast for the candidate or a blanket cap. For example, in the 2008 election, candidates for the Legislative Council of Hong Kong were entitled to a rebate up to HK$11 per vote.


The concept of political finance can affect various parts of a society's institutions which support governmental and social success.[8] Correct handling of political finance impacts a country's ability to effectively maintain free and fair elections, effective governance, democratic government and regulation of corruption.[8] The United Nations convention against Corruption, recognizing this, encouraged its members to "enhance transparency in the funding of candidatures for elected public office and, when applicable, the funding of political parties."[9] Throughout the world countries have identified the problems which improper use of political finance could entail.[10] When conducting a study pursuing and understanding of what international civil society has determined integral to regulation of political finance, Magnus Öhman and Hani Zainulbhai identified several common understandings by these organizations:[10]

  1. Money is necessary for democratic politics, and political parties must have access to funds to play their part in the political process. Regulation must not curb healthy competition.
  2. Money is never an unproblematic part of the political system, and regulation is desirable
  3. The context and political culture must be taken into account when devising strategies for controlling money in politics
  4. Effective regulation and disclosure can help to control adverse effects of the role of money in politics, but only if well conceived and implemented
  5. Effective oversight depends on activities in interaction by several stakeholders (such as regulators, civil society and the media) and based on transparency.

Their study also affirmed the perspective laid down by the Council of Europe, when discussing the concept of effective regulation of campaign financing: "[We are] convinced that raising public awareness on the issues of prevention and fight against corruption in the field of funding of political parties is essential to the good functioning of democratic institutions."[10]

See also[edit]

Political action committee




  1. ^ Heard 1960.
  2. ^ Pollock, James K., Party Campaign Funds. New York, NY: Knopf, 1926.
  3. ^ Overacker, Louise, Money in Elections. New York, NY: Macmillan, 1932.
  4. ^ Ansolabehere, Stephen; John de Figueiredo, James M. Snyder, Jr. (2003). "Why Is There So Little Money in U.S. politics?". Journal of Economic Perspectives (Massachusetts Institute of Technology) 17 (1): 105–130. doi:10.1257/089533003321164976. 
  5. ^ Gill, David & Lipsmeyer, Christine (2005). Soft Money and Hard Choices: Why Political Parties Might Legislate Against Soft Money Donations. Public Choice. SSRN 1422616. 
  6. ^ "Begging for Bucks". Campaigns and Elections. Retrieved 2007-03-12. [dead link]
  7. ^ Smilov, Daniel and Jurij Toplak (2007). Political Finance and Corruption in Eastern Europe. Ashgate Press. ISBN 978-0-7546-7046-9. 
  8. ^ a b Ohman and Zainulbhai 13-14
  9. ^ Ohman and Zainulbhai 13
  10. ^ a b c Ohman and Zainulbhai 16–7


Further reading[edit]

  • Abramoff, Jack (November 7, 2011). Capitol Punishment: The Hard Truth About Washington Corruption From America's Most Notorious Lobbyist. WND Books. ISBN 978-1-936488-44-5. 
  • Ackerman, Bruce and Ian Ayres (February 10, 2004). Voting with Dollars. Yale University Press. ISBN 0-300-10149-X. 
  • Alexander, Herbert E. "Campaign Financing in International Perspective" in Michael J. Malbin, ed. (1980). Parties Interest Groups and Campaign Finance Laws. American Enterprise Institute. ISBN 0-8447-2167-0. 
  • Birnbaum, Jeffrey (June 6, 2000). The Money Men : The Real Story of Fund-raising's Influence on Political Power in America. Crown. ISBN 0-8129-3119-X. 
  • Bike, William S. (2012). Winning Political Campaigns: A Comprehensive Guide to Electoral Success. Central Park Communications. ISBN 978-1-452499-82-6. 
  • Clawson, Dan ; Alan Neustadtl; Mark Weller (May 1998). Dollars and Votes: How Business Campaign Contributions Subvert Democracy. Temple University Press. ISBN 1-56639-626-3. 
  • Coate, Steven (2004). Pareto Improving Campaign Finance Policy. American Economic Review. 
  • Green, Mark (2004). Selling Out: How Big Corporate Money Buys Elections, Rams Through Legislation, and Betrays Our Democracy. Regan Books. ISBN 0-06-073582-1.  New York mayoral candidate who lost to Bloomberg.
  • Malbin, Michael J. (March 2006). The Election After Reform: Money, Politics, and the Bipartisan Campaign Reform Act. Rowman & Littlefield Publishers, Inc. ISBN 0-7425-3870-2. 
  • Milyo, Jeffrey (2008). "Campaign Finance". In David R. Henderson (ed.). Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658. OCLC 237794267. 
  • Samples, John (2006). The Fallacy of Campaign Finance Reform. University of Chicago Press. ISBN 978-0-226-73450-7. 
  • Smith, Bradley A. (March 1, 2001). Unfree Speech : The Folly of Campaign Finance Reform. Princeton University Press. ISBN 0-691-07045-8. 
  • Ward, Gene. Transparency in Money in Politics: A Comparison of the United States and Canada.  PDF

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