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Financing Politics: A Global View

Author: M Pinto-Duschinsky
Date: 2004
Size: 18 pages (106 KB)

Summary

What is the extent of corruption in political financing in developing countries? Is it possible to tackle corruption through the public funding of election campaigns? Are existing laws and regulations sufficient to deal with corrupt political financing? This journal article argues that in light of the strong links between political corruption and political financing in developing countries, there should be renewed debate on the benefits of public financing as a means of tackling corrupt practices and a re-evaluation of existing political financing legislation, particularly disclosure laws.

Corrupt political financing refers to a range of activities, including: contributions that contravene laws on political financing; the use of funds from corrupt transactions for campaign purposes; the receipt of money in return for favours post-election; and engaging in banned activities such as vote-buying. Addressing the problem of corruption in political financing requires further inquiry into the role of regulations and subsidies, which can be divided into three main types: direct public funding, disclosure regulations and free television broadcasts.

Due to the controversial nature of direct public funding to political parties and election candidates, greater attention should be paid to its impact. Recent evidence indicates that:

There is a global trend towards public financing, although the amount and proportion of subsidies vary greatly between countries and may even be insignificant in some cases.
Public funding does not appear to have produced either the benefits envisaged by its supporters or the disadvantages expected by its critics since its introduction in the late 1950s.
Public funding is not sufficient to prevent corruption, as evidenced by serious corruption scandals in countries that provide generous public funding (Germany, Spain and France).
There is little evidence to support the view that public funding reduces incentives for political parties to recruit new members or raise money from independent sources.
The analysis of public funding must include subsidies-in-kind, as these may be more valuable than direct payments. This includes the provision of free radio and television broadcasting to political parties and election candidates.

Existing legislation is inadequate. Whilst the biggest challenge centres on disclosure laws, there is a lack of political will to enforce legislation or to widen its application. Nevertheless, as a source of both scandal and social inequality, corruption in political financing remains high on the development agenda. Donors and policy-makers can learn from the experiences at a global level by:

Understanding the links between political corruption and political financing. This is vital for the World Bank and the IMF, which lead many anti-corruption campaigns, yet are reluctant to raise the issue of political financing.
Recognising both the benefits of public financing (a legitimate means for candidates to fund their campaigns), as well as the limitations (on-going scandals in countries that provide state funding).
Ensuring the adequate enforcement of political financing laws to protect the integrity of the political and electoral process. These efforts must go beyond simple legislative solutions and focus on key laws relating to disclosure.
Guaranteeing local ownership of reform. Reassess the contribution of donor-funded "public interest" lobbies and civil society organisations that claim to assist in political financing reform but do not have a local support base.
Facilitating further research on political financing and the scope of corruption in developing countries to close the gap between perception and reality. This requires data-collection and scrutiny by journalists, academics and politicians.

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Source: Pinto-Duschinsky, M., 2004, ‘Financing Politics: A Global View’, in Ndubisi Obiorah (ed.)Political Finance and Democracy in Nigeria, Lagos: Centre for Law and Social Action, Nigeria

Originally published in the Journal of Democracy: Pinto-Duschinsky, M., 2002, ‘Financing Politics: A Global View’, Journal of Democracy, Vol. 13, No. 4.