Do political donations disclosures increase or decrease confidence in the the political process?

One argument for stricter disclosure and control of political donations is to improve public perceptions of the political process. A NSW Parliament report from earlier this year said:

In evidence to this inquiry, the need for reform to restore public confidence in the integrity of the system was recognised by most of the political parties that are currently represented in the New South Wales Parliament…

It’s never been clear to me whether the disclosure regime would increase or decrease public confidence.

The general knowledge that it exists may increase confidence. On the other had, almost every specific mention of a donation is used to impugn donor and decision-maker alike. This could decrease confidence by providing more news hooks for negative stories about how politicians may favour donors.

However an analysis of political integrity questions asked by pollsters suggests that public confidence has generally been increasing over time.

In 2007, after the Howard government had altered electoral law so that fewer donations were disclosed, satisfaction with Australian democracy was at its highest point (86%) of four surveys since 1998.

Trust in politicians to do the right thing declined between 1996 and 1998 (the broken promises of the first Howard goverment?), but steadily increased again after that to higher levels than 1996 by 2007.

On the topic that most interests me, perceptions of the role of interest groups in politics, the trend is also positive after 1998 (see figure). The 2007 figure is particularly interesting given that the election shortly before the survey was conducted saw the biggest interest group campaigns in Australian history over WorkChoices.

Question: ‘Would you say the government is run by a few big interests looking out for themselves, or that it is run for the benefit of all people?’
Sources: 1986-7 National Social Science Survey, 1998-2007 Australian Election Study

Unfortunately the question wording for related earlier questions is too different for direct comparison (more cynical than these, but without the ‘half and half’ option).

These results don’t support the hypothesis that disclosure reduces public confidence in the political process. On the other hand, the trends don’t support the claim that there is a great need to introduce reforms to increase public confidence.

My guess would be that the disclosure regime has little impact either way. The favouring of interest groups has mostly been evident all along from government policies, and the disclosure regime adds little to that. The low number of successfully prosecuted scandals in this area – and indeed the reality that most handing out of government contracts follows proper processes – has meant that public perceptions in this area have improved modestly over time.