In the US, citizens can weigh in on state and local government proposals to issue new debt through direct referendums. In new research Mikhail Ivonchyk finds that when voters are given information clearly stating the specific benefits of approving new debt, they are much more likely to support approving the bond measure in a referendum. He writes that simply providing voters with more information about benefits could be a low-cost, high-return strategy for government officials to boost public support in referendums.

Bond referendums and their importance

Public referendums give voters the opportunity to provide their direct approval or disapproval on important public policy issues. In the United States, voter approval is often required for new debt issued by state and local governments. Similarly, countries like Greece and Iceland have used referendums to seek voter approval for debt resettlement (changing the terms of repayment). However, not all referendums succeed, as taxpayers may oppose specific projects, new debt in general, or potential property tax increases. Failed referendums result in wasted resources, project delays or cancellations, and difficult decisions for policymakers who may be forced to make tradeoffs between ensuring a sufficient level and quality of current services and making long-term capital investments. Understanding the factors which can determine referendums outcomes, especially regarding debt, is thus very important.

What do we know about the factors that affect the outcome of bond referendums? 

Researchers have identified several important predictors of the success of bond referendums, including the purpose of the new debt and various voter and government characteristics. Additionally, studies have shown that information provided on the ballot can influence voter behavior. For example, an explanation of tax costs or even a mention of the word “tax” tend to decrease voter support. However, it has remained unclear whether explaining the benefits of approving new debt could counteract this negative effect. Given growing concerns about public debt and fears of misuse and waste of public resources, explicitly connecting debt proceeds to specific improvements could alleviate these concerns and increase voter support.

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Testing the effect of benefits information 

To test the influence of benefits information, I surveyed 1,000 respondents across the United States. Participants were asked to approve a new school construction bond in a hypothetical local election scenario. They were randomly assigned to four groups: control, costs, benefits, and costs and benefits.

The control group saw only the question asking if they approve a new bond to pay the cost of construction and equipping a new school building. The “costs” group saw the question and the approximate annual property tax increase if the bond was approved. In contrast, the “benefits” group saw the question and benefits information stating that the new school would have better technology to improve student performance, enhanced security, and an upgraded heating and ventilation system to better monitor the air quality and prevent health hazards. The benefits were chosen based on a survey of public schools in the United States, which identified these as the top three school facility condition issues. The costs information was sourced from a comparable real capital bond referendum ballot measure.

Benefits information significantly increases voter support

The experiment revealed that providing benefits information increased voter support by 14 percent, with variations from 10 to 17 percent depending on individual voter characteristics. Even when cost information was provided alongside benefits, the positive effect persisted, albeit slightly declined to about 10 percent. The positive effect of benefits was consistent across diverse population groups, including homeowners, individuals without children, and supporters of private education.

So what? Policy implications

My research offers important insights for practice. Clear statements of benefits can effectively boost public support in bond referendums, providing government officials with a low-cost, high-return strategy, which, unlike many other influential factors, is under their control. There is a possibility that a clear statement of benefits may influence public support on other policy issues beyond debt. Additionally, while cost information may decrease voter support, the net effect of costs and benefits can be positive. However, the magnitude of additional costs and expected benefits will determine the net effect of both pieces of information provided together.

Finally, there is risk that benefits may be intentionally overstated to sway voters in a specific direction. To prevent intentional overstatement of benefits, measures should be implemented to ensure the stated benefits are genuine and based on evidence. Transparency in benefits estimation, independent verification of ballot information, internal fact-checking involving diverse stakeholders, and legal consequences for misrepresentation can help mitigate this risk.

• This article is based on the paper, ‘Knowing what you pay for: Does benefits information increase bond referendums support?’ in Public Administration Review. 
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• Note: This article gives the views of the author, and not the position of USAPP – American Politics and Policy, nor the London School of Economics. 
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