Civic crowd-funding: a potential test of the voluntary theory of public finance for public capital goods

Abstract

There have been many innovations in public finance in the 21st century to address increasing budget constraints and increasing demands from government. One innovation has been civic crowd-funding which began in 2009. This is predicated on the voluntary commitment of funds by individual and institutional donors and investors for specific projects. This paper explores this new approach to funding capital projects and grounds it within a discussion of the Voluntary Theory of Public Finance. There is a lack of research on civic crowd-funding and a lack of theoretical approaches to it. This paper draws these connections and develops future directions of research that includes the continuing application of this approach, the increasing engagement of citizens in the administrative process of government and increasing budget constraints.