Confounding-Aware Client Selection in Federated Learning via Causal Mediation Analysis

Federated Learning (FL) enables collaborative model training across clients while preserving data privacy. However, FL typically relies on voluntary client participation with uniform rewards, which can lead to high-quality clients dropping out due to inadequate incentives and low-quality clients taking a free-ride, both of which degrade overall model performance. However, existing incentive mechanisms fail to capture the true contribution value of a client’s data to the global model, and often skew client selection toward cost compression rather than quality enhancement, thereby exacerbating confounding bias. To address this, we propose CausalAFL, a causal-based framework that reduces information asymmetry and corrects for confounding factors. Specifically, CausalAFL builds a complete causal chain connecting client information, bid, and marginal contribution. By jointly optimizing an inference network and a generative network within a variational inference framework, it precisely adjusts for causal bias. Maximizing the evidence lower bound objective allows CausalAFL to separate true contribution from noise and highlight the value of high-quality clients. A social welfare objective that quantifies both natural direct and indirect effects guides the server to prioritize these clients, resulting in improved global model accuracy and social welfare. Experiments on multiple datasets demonstrate that CausalAFL can guide clients to adjust their bids, leading to winners with higher contributions, confirming its effectiveness.