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Key Text Money in Politics Handbook: A Guide to Increasing Transparency in Emerging Democracies

Author: United States Agency for International Development (USAID)
Date: 2003
Size: 91 pages (287 KB)

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Summary

How does money impact on politics? How can transparency in emerging democracies be extended? This handbook is the first publication by United States Agency for International Development (USAID) on the topic of political finance in emerging democracies. It’s purpose is to increase understanding of this obscure and sensitive topic. It aims to create awareness of the issues and benefits of open finances and suggests practical technical options that encourage disclosure as a methodology for strengthening democratic political processes.

While the political histories of nations are well known, their political financial history is only now being written. Disclosure is not the last word in campaign and party finance, but it is the most essential first word on how to increase transparency in emerging democracies.

The main premise is that disclosure of campaign and political party finance is the cornerstone upon which all other attempts to control money in politics rest. Transparency is a key pre-requisite for democracy and crucial to the legitimacy of elected officials and political processes. Other conclusions from the survey are:

Money in politics is important. Without it, competitive multi-party democracies would cease to function. Yet risks include uneven playing fields, unequal access, co-opted politicians and tainted politics.
The six approaches for controlling money in politics are contribution limits, contribution bans, spending limits, campaign time limits, public disclosure and public financing.
There is no formula for the best combination of approaches for controlling money in politics. Limits and prohibitions can work only if there are adequate rules for disclosure.
Hidden donors are wide-spread. Only 32 per cent of countries require politicians to reveal the names of donors to political parties. Hence, funding could escape public scrutiny.
Secrecy is prevalent. Of countries surveyed, 23 per cent have no disclosure laws whatsoever, thus depriving the public of a basis for informed discussion.
A further 17 per cent practice hidden disclosure where some political information is collected but not released to the public.

It is not easy to determine how money in politics is a problem, there is no systematic methodology for approaching the issue and each country situation is unique. A framework for strategic assessment suggests:

Defining the nature and extent of the problem. Which risks are the most serious? What is the inter-relation of risk factors?
Identifying key actors and allies. These groups include election commissions, reform-minded politicians, civil society and the media. Coalitions for democracy practitioners should be strengthened.
Identifying the legal framework and practice. This helps identify the nexus between policy and practice.
Supporting regional organisations who actively pursue agendas of financial disclosure such as the Association of Central and Eastern European Election Officials (ACEEEO).
Encouraging reform with political parties and leaders. Assistance should be provided to help shape a reform agenda that stresses disclosure benefits to both the public and candidates.
Strengthening enforcement. Enforcement can occur indirectly by working with coalitions to lobby for better enforcement of laws, or, through improving the legal framework and institutional weakness.

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Source: USAID Office of Democracy and Governance, 2003, ‘Money in Politics Handbook: A Guide to Increasing Transparency in Emerging Democracies’, USAID Technical Publication Series, USAID, Washington DC.
Author: United States Agency for International Development - Democracy and Governance (USAID), http://www.usaid.gov/our_work/democracy_and_governance