Campaign finance is a controversial issue in modern elections. There are three approaches: public funding, private funding, and hybrid schemes. Private funding allows for expression of views but can lead to corruption. Public funding levels the playing field but limits access. Hybrid systems combine both and limit direct contributions. There is no consensus on which system is better.
As modern elections have become increasingly expensive, the issue of campaign finance has become controversial and hotly debated. While campaign finance laws vary greatly between democracies, there are essentially three general approaches to the problem. Public funding schemes use government money to pay for elections. Private funding schemes rely on contributions from individual or corporate donors to fund elections. Hybrid schemes try to balance these two types of financing and combine some elements of each.
Private campaign funding has the advantage of allowing individuals and interest groups to express their views and preferences through their political contributions. Private funding schemes often require applicants to invest significant time in fundraising, either directly or through proxies such as political action committees or political parties. There are close relationships that develop between large donors and candidates, so private campaign finance can lead to corruption or can suggest corruption to voters even when it doesn’t exist. A common solution to this problem is the adoption of disclosure laws so that voters can identify the source of political contributions.
Public campaign finance is intended to level the playing field among candidates and to limit the ability of small but wealthy groups to influence the outcome of elections. This type of funding is sometimes managed by allocating money directly to candidates, and sometimes it is managed through a media levy, which requires the media to provide a certain amount of time or space for political candidates to use. Public campaign finance typically still limits access, though, because most systems employ a threshold test of some sort to screen out fringe candidates from receiving funding.
Hybrid campaign finance attempts to split the difference between these two funding styles, combine public and private funds, and rely on some level of regulation to manage private contributions. The United States has historically employed a matching fund system, whereby presidential candidates receive federal money equal to the amount of private money they can raise. Hybrid systems generally allow but limit direct contributions from individuals or organizations in an effort to minimize the impact of small wealthy groups.
Critics can cite examples of difficulties with each of these campaign finance systems. The 1996 Russian elections were largely privately funded, but many political scientists saw them as models of corruption rather than free speech. The public side of the hybrid system employed by the United States in 2008 has shown signs of strain, as Barack Obama has chosen not to participate. There is no consensus on which campaign finance system is better.
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