The Effects of Public Campaign Funding: Evidence from Seattle's Democracy Voucher Program

During each election cycle, the city of Seattle distributes four $25 vouchers to every registered voter, which may be donated to and redeemed by campaigns for city office. Through a difference-in-differences research design, we study the causal effect of Seattle's program on various outcomes in city council elections in the first two cycles after implementation, with comparison cities drawn from large cities in Washington and California. We find a 53% increase in total contributions and a 350% increase in number of unique donors; these effects are largely explained by large increases in small donations, defined as contributions less than $200. We find statistically insignificant evidence of decreases in private donations, although our point estimates suggest moderate-to-substantial crowd-out ratios. We further estimate a highly significant 86% increase in number of candidates coupled with substantial decreases in incumbent electoral success. These results provide some of the first causal evidence of the effect of decentralized public campaign finance schemes, while speaking to the impacts of campaign regulation more generally on donation activity, candidate entry, and incumbency advantage.