Crowdfunding Public Projects: Collaborative Governance for Achieving Citizen Co-funding of Public Goods

TL;DR

This paper investigates how government involvement in crowdfunding enhances success rates and funding amounts for public projects, suggesting a collaborative governance model that leverages citizen co-funding to address societal challenges.

Contribution

It demonstrates that government involvement in crowdfunding increases project success and funding, highlighting a new collaborative governance approach for public project financing.

Findings

Government involvement correlates with higher success rates.

Projects with government backing attract more funding.

Crowdfunding can effectively co-fund public projects.

Abstract

This study explores the potential of crowdfunding as a tool for achieving citizen co-funding of public projects. Focusing on philanthropic crowdfunding, we examine whether collaborative projects between public and private organizations are more successful in fundraising than projects initiated solely by private organizations. We argue that government involvement in crowdfunding provides some type of accreditation or certification that attests to a project aim to achieve public rather than private goals, thereby mitigating information asymmetry and improving mutual trust between creators (i.e., private sector organizations) and funders (i.e., crowd). To support this argument, we show that crowdfunding projects with government involvement achieved a greater success rate and attracted a greater amount of funding than comparable projects without government involvement. This evidence shows that governments may take advantage of crowdfunding to co-fund public projects with the citizenry for addressing the complex challenges that we face in the twenty-first century.