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A Reform Architecture for Political Party Funding in Aotearoa New Zealand
Abstract
We recently published a comprehensive report on political party funding in Aotearoa New Zealand (Rashbrooke and Marriott, 2022). This article documents some of the issues we discovered in the process of writing that report and some of the solutions we propose to address these issues. We recommend stronger donation regulation: capping annual donations at $15,000 and donor identification for donations above $1,500. We also recommend increased state funding: for approximately $2 per voter per annum, ‘big money’ can be eliminated from the political finance arena. This improves transparency and – crucially – can significantly reduce the perception of influence from large donations.
This article explores tax credits for political party funding in Aotearoa New Zealand (NZ). Participation in the democratic process is low and declining in NZ, as political party membership drops and parties increasingly focus their attention on small numbers of large donors. Advantages of tax credits include incentivising parties to engage with society to attract donations, encouraging individuals to participate in the democratic process and potentially providing greater financial support to parties. The primary disadvantage is that tax credits require at least a small financial contribution from a donor, which will not be possible for everyone. For a relatively low cost of approximately NZ$2.35 per voter, large donations could be eliminated from the NZ political funding system, along with the concomitant potential for undue influence. Using the Canadian model for comparison, a similar system in NZ may result in greater public political engagement and better funded political parties.
What is the impact of campaign spending on votes? Does it vary across election types, political parties or electoral settings? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that handle the endogenous and strategic nature of campaign spending in multiparty systems. This paper provides novel contributions in both of these areas. We build a new comprehensive dataset of all French legislative and UK general elections over the 1993–2017 period. We propose new empirical specifications, including a new instrument that relies on the fact that candidates are differentially affected by regulation on the source of funding on which they depend the most. We find that an increase in spending per voter consistently improves candidates’ vote share, both at British and French elections, and that the effect is heterogeneous depending on candidates’ party. In particular, we show that spending by radical and extreme parties has much lower returns than spending by mainstream parties, and that this can be partly explained by the social stigma attached to extreme voting. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of why campaigns matter.
This article uses detailed, transaction-level data on candidate disbursements and panel survey data to estimate the effect of candidate spending. Transaction-level data allow me to isolate only spending that is being used on messages to voters, while panel survey data enable me to control for unobserved candidate characteristics. I find that spending on messages to voters has a statistically significant effect on voter support for candidates. Spending is especially effective in changing the composition of voters, instead of convincing potential voters to switch their vote. Not all voters are equally affected by spending; low-information voters, members of a political party and the economically dissatisfied respond strongly to candidate spending. Finally, I provide evidence that the most commonly used measure of candidate spending overestimates the amount of money that candidates use on their own campaigns, and regressions using this measure are less likely to find a statistically significant effect of spending. © 2020 by the Southern Political Science Association. All rights reserved.
In November 2015 the Organised Crime and Anti-corruption Legislation Bill was passed by Parliament. An omnibus bill, it amended numerous different acts in relation to (among other things) money laundering, organised crime, corruption and bribery offences. One of its stated aims was to bring New Zealand legislation up to date to enable New Zealand to finally ratify the United Nations Convention against Corruption (UNCAC), which it did in December that year. The merits and potential demerits of the bill have been discussed previously (Macaulay and Gregory, 2015), but one thing that requires further attention is the creation of a new offence of ‘trading in influence’.
One of the activities corporations should be accountable for is their level of political donations. This paper examines two mandatory corporate political donation disclosure regimes in Australia and identifies three important lessons. First, our review confirms that although few citizens may care enough to scrutinise donation disclosure, there are people interested in such information and we should take political donation disclosure regimes seriously. Second, a well-funded entity must be made responsible not just for administering the disclosure system, but also for reviewing and recommending updates to the system. One disclosure regime examined in this paper was never updated to reflect the existence of the internet until 2007, because no-one was responsible for monitoring the regime and suggesting necessary updates. Finally, details concerning the ultimate source of donations should be provided.
Over the past 30 years, research on government contracting has identified three major influences that help explain variation in contracting decisions—managerial, organizational, and political. This study looks to advance the political influence literature by introducing a factor that has received limited attention—vendor influence. This study specifically focuses on contract transactions at the U.S. federal government to determine if vendors influence the contract award. Traditionally, political influence is studied at the macro or meso levels. This study shifts the unit of analysis to the micro level which requires a change in measurement of political influence. The study uses vendor campaign contributions to capture political influence on this new level of focus.
It is clear that corporations seek to use campaign contributions to gain government contracts, but despite anecdotes, whether they succeed has been largely ignored in academic studies. In this article, I discuss how campaign contributions may influence contracting and consider the relationship between the donation of campaign contributions and the receipt of government contracts for a sample of firms politically active between 1979 and 2006. The analysis shows that even after controlling for past contracts and other factors, companies that contributed more money to federal candidates subsequently received more contracts. In the conclusion, I discuss the implications of this finding for future research and for reforming the contracting process. The Author 2011. Published by Oxford University Press on behalf of the Journal of Public Administration Research and Theory, Inc. All rights reserved. For permissions, please e-mail: [email protected]
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Political scientists have pointed out that access is an important motivation for campaign contributions, but their evidence to date is based largely on case study observations, on the opinions of participants and observers, and on inferences from indirect quantitative evidence. This paper provides more direct quantitative evidence on the topic, using data from the Commission on Administrative Review of the House of Representatives in the 95th Congress. It uses tobit analysis to estimate the impact of PAC campaign contributions and several other independent variables, including indicators of a member's tenure, legislative position, and electoral security, on the number of minutes that members spent in their office with representatives of organized interest groups during a typical workweek. The results suggest, but do not prove, that money does indeed buy access.
This article assesses the impact of campaign spending on incumbent and challenger vote shares in elections to the Brazilian Chamber of Deputies. I argue that incumbents and challengers gain equally from campaign spending. This contrasts with the prominent argument about U.S. House elections that incumbents gain little from spending while challengers gain a great deal. In the U.S., incumbents gain little because being in office generates significant name recognition and additional spending suffers quickly from diminishing returns. In contrast, challengers gain a lot because they start the campaign from scratch. In Brazil, because incumbency provides fewer benefits than in the U.S., both incumbents and challengers must spend money to increase their name recognition and both benefit from spending. My findings imply that campaign spending limits in Brazil would encourage rather than restrict competition, and they point to the importance of assessing the relative advantages of incumbency when assessing the impact of campaign spending.
"To what extent can market participants affect the outcomes of regulatory policy? In this paper, we study the effects of one potential source of influence-campaign contributions-from competing interests in the local telecommunications industry, on regulatory policy decisions of state public utility commissions. Our work is unique in that we test the effects of campaign contributions on measurable policy outcomes. This stands in stark relief against most of the existing literature, which examines potentially noisier measures of policy outcomes-such as the roll-call votes of legislators, to examine how private money may influence public policy. By moving to more direct measures of policy effects, and using a unique new dataset, we find, in contrast to much of the literature on campaign contributions, that there is a significant effect of private money on regulatory outcomes. This result is robust to numerous alternative model specifications. We also assess the extent of omitted variable bias that would have to exist to obviate the estimated result. We find that for our result to be spurious, omitted variables would have to explain more than five times the variation in the mix of private money as is explained by the variables included in our analysis. We consider this to be very unlikely." Copyright 2007, The Author(s) Journal Compilation (c) 2007 Blackwell Publishing.
Using novel indicators of political connections constructed from campaign contribution data, we show that Brazilian firms that provided contributions to (elected) federal deputies experienced higher stock returns than firms that did not around the 1998 and 2002 elections. This suggests that contributions help shape policy on a firm-specific basis. Using a firm fixed effects framework to mitigate the risk that unobserved firm characteristics distort the results, we find that contributing firms substantially increased their bank financing relative to a control group after each election, indicating that access to bank finance is an important channel through which political connections operate. We estimate the economic costs of this rent seeking over the two election cycles to be at least 0.2% of gross domestic product per annum.
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