PRESSURE GROUP POLITICS ARE GOOD FOR DEMOCRACY

Contrary to conventional wisdom, campaign donations by special interests actually promote the democratic process. That is the conclusion of research by Professor Donald Wittman, published in the October 2009 issue of the Economic Journal.

His study analyses a situation in which a political candidate must rely on a pressure group for financing advertising. The pressure group uses its power over the purse to influence the position chosen by the candidate. Nevertheless, when uninformed voters respond rationally to political advertising, pressure group contributions always move the outcome of the election closer to the preferences of the uninformed voter and the average (median) voter.

Consider first how rational but uninformed voters would respond to political advertising if it were true that politicians trade off good policy in return for donations that fund political advertising. Knowing this, uninformed voters could just watch TV and notice which politician was doing the most advertising and then vote for the other candidate who was less willing to trade off good policy and as a result did not get as much advertising money from special interests. Realising this, politicians would not accept advertising money in the first place. So trading off good policy for campaign contributions does not make much sense.

Wittman’s main argument proceeds as follows. In the absence of political advertising, only the informed voters influence the election and, as a consequence, the candidates converge to the median preference of the informed voters. Political advertising and endorsements provides limited but very useful information to the uninformed voter. For example, an endorsement by the National Rifle Association (NRA) tells uninformed voters that the endorsed candidate has a position closer than the other candidate to the position held by the NRA. The same holds for endorsements by other pressure groups.

When the preferences of the uninformed are closer to the policies of the pressure group than the preferences of the informed, then the pressure group will endorse the candidate closer to its position and provide money for advertising that this is the case.

Uninformed voters will employ the following rule of thumb: those whose positions are closer than the median voter to the NRA will vote for the candidate endorsed by the NRA; those whose positions are farther away than the median voter to the NRA will vote against the candidate endorsed by the NRA.

The NRA will put its money in contests where the majority of uninformed voters are sympathetic to the goals of the NRA and persuade the candidate to move closer to the NRA's position in return for an endorsement and funds for political advertising. The result is a move toward the median uninformed voter and the median voter, overall.

Wittman’s argument is supported by earlier research showing that uninformed voters learn about the candidates’ positions during elections and vote consistent with their pre-existing preferences about policy rather than being irrationally persuaded to vote against their own interests.

The following question naturally arises. If, as Wittman argues, campaign contributions by pressure groups aid the democratic process, then why do we see so many attempts, such as the McCain-Feingold bill, to put limits on campaign financing?

The answer also lies in this study. As indicated, pressure group contributions to political campaigns hurt some of the participants – informed voters on average and those informed voters whose preferences run contrary to the median uninformed voter in particular. It also hurts those policy-preferring candidates whose preferences are more aligned with the median informed voter than with the median uninformed voter.

It is not surprising that these candidates and their supporters would be against unlimited campaign financing and make unwarranted claims that campaign donations by special interests are anti-democratic.

ENDS

Notes for editors: ‘How Campaign Endorsements Activate Uninformed Voters’ by Donald Wittman is published in the October 2009 issue of the Economic Journal.

Donald Wittman is at the University of California at Santa Cruz.

For further information: contact Donald Wittman on +1 831 459 4445 (email: wittman@ucsc.edu); or Romesh Vaitilingam on 07768-661095 (email: romesh@vaitilingam.com).