Periodic Reporting for period 3 - PARTICIPATE (CamPAign Finance, InfoRmaTIon and InfluenCe: A ComprehensIve APproAch Using Individual-Level Data and CompuTEr Science Tools)
Reporting period: 2024-02-01 to 2025-07-31
The goal of PARTICIPATE is to develop a comprehensive approach to the study of campaign finance, information and influence, using new individual-level data and investigating recent changes in participation behaviors. What are the motives behind small campaign contributions? Does tax policy affect political giving? Why are so few politicians from the working class and can this change? What is the ability of the media to induce citizens to make electoral decisions they would not make if reporting were unbiased? While there is evidence at the macro level on the flow of money in elections, news consumption, or the extent of charitable giving, relatively little is known at the micro level, e.g. on individual-level behaviours such as the motivations of small donors, the tax-price elasticity of political donations, or the exposure to competing information flows. The overall objective of PARTICIPATE is to help fill this gap.
During the period covered by this reporting, PARTICIPATE has advanced the existing research by proposing a unified analysis of political contributions. First, together with L. Bouton, E. Dewitte and V. Pons, I wrote an article entitled “Small Campaign Donors” in which we provide a groundbreaking assessment of the importance of small campaign donations.
Second, together with M. Guillot, in an article entitled “Is Charitable Giving Political? Evidence from Wealth and Income Tax Returns”, we provided a combined study of charitable giving and political contributions investigating the impact of tax policy on donations.
Third, in a project called “The Far-Right Donation Gap” (with M. Hengel and Y. Huang) , we document a widespread decline in the share of donors to charities in Western countries over the past decade, and show that this can be in part explained by a lower propensity to donate among far-right voters.
Fourth, I published a review article on “Political Inequality” in the Annual Review of Economics.
Fifth, in a project called “Should Charitable and Political Donations Benefit from Similar Tax Treatments? Evidence from a Survey Experiment” (with M. Guillot and Y. Huang) we investigate the relative efficiency of different tax shcemes for charitable and political donations.
Six, in a project called “Tax Incentives or Political Motivations? Evidence from Corporate Contribution” (with A. Denis, M. Guillot, S. Muchardt and C. Urvoy) we estimate the tax price elasticity of corporate donations, and investigate how it differs depending on the recipients' purposes and the donors' characteristics.
Finally, in the book A history of political conflict. Elections and social inequalities in France, 1789-2022 (with T. Piketty) we offer a history of voting and inequality based on the French laboratory.
Second, together with M. Guillot, in an article entitled “Is Charitable Giving Political? Evidence from Wealth and Income Tax Returns”, we provided a combined study of charitable giving and political contributions investigating the impact of tax policy on donations.
Third, in a project called “The Far-Right Donation Gap” (with M. Hengel and Y. Huang) , we document a widespread decline in the share of donors to charities in Western countries over the past decade, and show that this can be in part explained by a lower propensity to donate among far-right voters.
Fourth, I published a review article on “Political Inequality” in the Annual Review of Economics.
Fifth, in a project called “Should Charitable and Political Donations Benefit from Similar Tax Treatments? Evidence from a Survey Experiment” (with M. Guillot and Y. Huang) we investigate the relative efficiency of different tax shcemes for charitable and political donations.
Six, in a project called “Tax Incentives or Political Motivations? Evidence from Corporate Contribution” (with A. Denis, M. Guillot, S. Muchardt and C. Urvoy) we estimate the tax price elasticity of corporate donations, and investigate how it differs depending on the recipients' purposes and the donors' characteristics.
Finally, in the book A history of political conflict. Elections and social inequalities in France, 1789-2022 (with T. Piketty) we offer a history of voting and inequality based on the French laboratory.
The article “Small Campaign Donors” contributes to the large literature on campaign donations by studying the contributions of small donors and the differences with large donors’ behavior. The existing literature has mainly focused on the total aggregate resources available for political campaigns or on large political contributions. Small donors have been overlooked and existing work mostly relies on survey data. By contrast, this paper relies on administrative data, thereby addressing well- known limitations of self-reported data, and studies the effect of the alignment between donors and candidates’ sociodemographic characteristics on donations.
The article entitled “Is Charitable Giving Political? Evidence from Wealth and Income Tax Returns” contributes to the long tradition of research analyzing philanthropic giving, and in particular estimating the tax-price elasticity of giving.
The contribution is fourfold. First, while the focus of the existing literature – to the exception of Petrova et al. (2020) – is on charitable contributions, we also consider political donations that benefit from similar tax incentives but may be driven by different motivations. We contribute to this literature by looking at substitution effects within the same donors.
Second, while the focus of the existing literature has been on the income tax, our paper also exploits variations in the wealth tax and estimates the cross-price elasticity of giving. We are the first to study the extent to which wealth-tax deductions impact donations.
Third, while the existing research mostly uses survey data, sample of tax payers or focuses on the top of the income distribution when using tax returns, we rely on an exhaustive administrative panel dataset and estimate the elasticities at different levels of the distribution. Almunia et al. (2020) similarly use administrative tax return data (from the UK). But while they only consider the income tax and focus on charitable giving, we study both income and wealth tax and investigate whether there are substitution effects between charitable and political donations.
Finally, this paper also contributes to the literature on the political economy of charitable giving by estimating whether charitable giving and political donations act as substitutes or complements. Furthermore, we provide novel evidence on political motivations driving donations by donors at the very top of the income and/or wealth distribution who tend to be absent from surveys while they drive a large share of the observed donations.
Third, the paper entitled “The Far-Right Donation Gap” contributes to the nascent literature that highlights the role of political preferences in the decision to give money to a non-profit organization. While there is a large literature investigating the determinants of charitable donations, the focus has mostly been on the overall rise of the charitable sector, with little attention to the fact that the share of donors among citizens has actually been decreasing in recent years.
Fourth, the working paper entitled “Tax Incentives or Political Motivations? Evidence from Corporate Contribution” contributes to the literature by providing the first estimation of the tax price elasticity of corporate giving using an exhaustive administrative panel dataset of firms and novel empirical strategies that allow us to overcome endogeneity biases. Furthermore, we also contribute to the recent literature on “tax-exempt lobbying” that shows that, at least in the U.S. context, corporations sometimes use giving as a means to influence politics
Fifth, the working paper “Should Charitable and Political Donations Benefit from Similar Tax Treatments? Evidence from a Survey Experiment” contributes to the literature on giving and tax incentives by estimating not only the elasticity of charitable donations but also the one of the political ones, in a context where both kind of donations benefit from a similar tax treatment.
Finally, the book A history of political conflict is a pioneering history of voting and inequality, drawing on an unprecedented data set covering more than two centuries of sociological findings.
Additional expected results are:
- The publication of a Working Paper on “The Rising Demand for Representation: Lessons from 100 Years of Political Selection in the UK” as part of Project 2.
- The finalization of Project 3 which is still work-in-progress.
The article entitled “Is Charitable Giving Political? Evidence from Wealth and Income Tax Returns” contributes to the long tradition of research analyzing philanthropic giving, and in particular estimating the tax-price elasticity of giving.
The contribution is fourfold. First, while the focus of the existing literature – to the exception of Petrova et al. (2020) – is on charitable contributions, we also consider political donations that benefit from similar tax incentives but may be driven by different motivations. We contribute to this literature by looking at substitution effects within the same donors.
Second, while the focus of the existing literature has been on the income tax, our paper also exploits variations in the wealth tax and estimates the cross-price elasticity of giving. We are the first to study the extent to which wealth-tax deductions impact donations.
Third, while the existing research mostly uses survey data, sample of tax payers or focuses on the top of the income distribution when using tax returns, we rely on an exhaustive administrative panel dataset and estimate the elasticities at different levels of the distribution. Almunia et al. (2020) similarly use administrative tax return data (from the UK). But while they only consider the income tax and focus on charitable giving, we study both income and wealth tax and investigate whether there are substitution effects between charitable and political donations.
Finally, this paper also contributes to the literature on the political economy of charitable giving by estimating whether charitable giving and political donations act as substitutes or complements. Furthermore, we provide novel evidence on political motivations driving donations by donors at the very top of the income and/or wealth distribution who tend to be absent from surveys while they drive a large share of the observed donations.
Third, the paper entitled “The Far-Right Donation Gap” contributes to the nascent literature that highlights the role of political preferences in the decision to give money to a non-profit organization. While there is a large literature investigating the determinants of charitable donations, the focus has mostly been on the overall rise of the charitable sector, with little attention to the fact that the share of donors among citizens has actually been decreasing in recent years.
Fourth, the working paper entitled “Tax Incentives or Political Motivations? Evidence from Corporate Contribution” contributes to the literature by providing the first estimation of the tax price elasticity of corporate giving using an exhaustive administrative panel dataset of firms and novel empirical strategies that allow us to overcome endogeneity biases. Furthermore, we also contribute to the recent literature on “tax-exempt lobbying” that shows that, at least in the U.S. context, corporations sometimes use giving as a means to influence politics
Fifth, the working paper “Should Charitable and Political Donations Benefit from Similar Tax Treatments? Evidence from a Survey Experiment” contributes to the literature on giving and tax incentives by estimating not only the elasticity of charitable donations but also the one of the political ones, in a context where both kind of donations benefit from a similar tax treatment.
Finally, the book A history of political conflict is a pioneering history of voting and inequality, drawing on an unprecedented data set covering more than two centuries of sociological findings.
Additional expected results are:
- The publication of a Working Paper on “The Rising Demand for Representation: Lessons from 100 Years of Political Selection in the UK” as part of Project 2.
- The finalization of Project 3 which is still work-in-progress.