Democratism Blog

source, rights: bit.ly/1PUUdDm (modified)

What makes a public project public? Government often funds private projects with taxpayer money. What about the opposite–when private donations fund a government project? I just learned about Citizinvestor,  (ht govtech), “a crowdfunding and civic engagement platform for local government projects.” Think Kickstarter for municipal projects. Contributions are tax-deductible but subject to an 8% fee. Recently posted projects include restoring trees to the city parks of Middletown OH, which lost 200 trees to the emerald ash borer ($5400 sought) and pavement markers and street signs for a proposed pedestrian and bicycle pathway in Angels Camp, CA (also $5400).

In principle this is a lot like my kid’s public school, which relies on money the PTA raises from parents. Kinda makes you wonder: If the public money isn’t enough to fund the cost of a good school, shouldn’t we increase the public funding so that kids whose parents can’t make up the difference get a good school, too? A “crowdfunding” site for government projects just generalizes the issue. What’s wrong with taxation—government’s own ancient and compulsory crowdfunding system?

One answer is that we don’t have a good, democratic system for deciding what’s socially valuable, except at very high levels of generality, mainly as to the few issues that matter in elections. Solving that problem is the goal of Democratism, but in the meantime, by voting with our pocketbooks we can steer social resources to specific projects that we know and care about as individuals.

The danger is that the people with money to give may not have the same priorities as everyone else. Of course, this same risk applies to all kinds of philanthropy, and indeed to essentially all money-spending by the very rich. Where it’s a government project, at least a public entity has implicitly judged that the project would be a net social benefit. You can’t say that about private projects, even though they may be tax-deductible.

A crowdfunding site might also lower administrative costs and so open the system up to more lower-level contributors. (The numbers I see on the site don’t give me the impression that there’s a tidal wave of interest in privately funding government projects like this, but you never know. Maybe it’s the fee.) Anyway, you can’t easily oppose more trees in parks and pavement markers on bike paths.

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