Would blind trusts solve the privacy vs. improper influence donations dilemma?

Andrew Leigh asks if I have a view on his suggestion that Australia should create blind trusts for political donations.

There are several pages on this in Andrew L’s co-authored 2004 book Imagining Australia, with the idea also summarised in this SMH op-ed. Instead of giving money directly to political parties, as now, donors would give anonymously to trusts that would then pass on the money to the donor’s selected party or candidate.

The argument is that the parties would have no way of knowing for sure who their donors were, and therefore would have less of an incentive to improperly favour their financial supporters. The anonymity of donations would also get around the problem, which I have discussed in the past, of people being reluctant to get involved in politics because they fear negative consequences if they back the losing side.

Blind trusts are, I think, a more persuasive solution to the latter problem than the former. Given it would be near-impossible to prevent donors telling parties about their donations (in the book, it is acknowledged that donors could provide a receipt), as a method of limiting corruption it’s hard to see that this is much more than the pre-disclosure system with some added bureaucracy. Some donors would prefer to remain anonymous – if only to save themselves future pestering by party fundraisers – but those hoping for something in return for their money are likely to make sure that the relevant people know about their donation.
Continue reading “Would blind trusts solve the privacy vs. improper influence donations dilemma?”