Campaign Finance

Wherever one finds elections, one finds money. Add to this truism the fact that citizens always pay for parties and elections, whatever the particular financing scheme (private, public, or some mix). In spite of the apparent significance of the issue, little consensus exists on how, exactly, to set up a campaign finance regime . There are no grand theories on the best system, no set answers to the fundamental questions involved: How much spending is too much? Should the state become involved to ensure a system's fairness? Is spending the same as free speech? Will an automatic benefit exist for the financially advantaged? Can elections be bought? Most people favor free and fair elections, for this is the foundation of governmental legitimacy. Agreeing on how to get there is another story. Four key areas must be examined to comprehend the vast complexity of campaign finance around the world: regulation, income, expenditures, and public funding.

A wide range of regulatory activity exists, but some general trends can be identified (one does need, though, to keep in mind that campaign finance laws are always evolving). Leaders of the vast majority of countries believe that the flow of money into politics must be regulated. The reality of, or the potential for, corruption, undue influence, or the misuse of public funds is too serious to ignore. Regulation can include party laws, election laws, tax laws, and laws about transparency in the process. Most countries have laws in place and a set of regulatory bodies to keep a watchful eye on the system and to punish violators.

From the United States to Ghana, similar sources of funding for parties and elections may be found. There are differences in the importance of each category, but one is likely to find most types in any given country. These sources include party dues and party-based fund-raising; public funding; donations from individuals, interest groups, and corporations; and kickbacks from recipients of government benefits. Regulations governing this flow of money can be divided into three subareas: disclosure, ceilings, and sources. Just over half of the countries listed by Freedom House (the leading research group evaluating political rights and civil liberties around the world) as free or partly free have rules on the disclosure of income, either by party or donor, but disclosure does not mean such information is publicly available in all cases. The vast majority of countries do not, however, place ceilings on contributions to political parties, donor contributions, or the amount of money parties can raise. A slim majority of countries have chosen to ban some types of donations, but the reasons vary greatly, and no majority is behind any particular type of ban. Concerns about foreign influence are the most apparent, with approximately 40 percent of countries banning foreign donations. Donations from various domestic groups are of much less concern but these bans can include corporations, government contractors, trade unions, and anonymous sources.

As with income, the regulatory framework involving expenditures can also be broken down into disclosure and ceilings. In this case, just under half of most countries require the public disclosure of party expenditures. The vast majority of countries (just under three-quarters) do not place a ceiling on election expenditures.

The most significant category of regulation in electoral finance is public funding. Public funding exists in two forms, direct and indirect, and plays a role in countries at all levels of political and economic development. Over half of most countries distribute direct public funding for such purposes as general party administration and electoral campaigns. Often, this support is meant as assistance, but in a few cases direct support is intended to promote spending equality among parties. Nearly three-quarters of countries worldwide engage in indirect public funding. This funding can take the form of special tax rules, free or discounted mail or phone use, free use of government buildings, or the printing of party ballots. Perhaps one of the most important types of indirect funding that the state is able to distribute is media access. Governments can provide access to state-owned media or mandate free access to private media. The amount of access given to any particular party is determined by a variety of factors; however, nearly half of all countries allocate radio or television broadcast time based on the principle of equal time for all parties.

Overall, most countries seem to be more willing to do what they can, directly or indirectly, to promote a fair electoral system than they are to restrict or closely regulate the activities of parties, interest groups, or individuals. It is important to reemphasize, however, that as accurate as the generalizations outlined above are, tremendous variation exists. The notion that advanced democracies regulate campaign finance in one specific set of ways and developing countries in another cannot be claimed.

However, there are significant differences between these two groups in terms of resource availability, the capacity of the state to uphold rules and enforce regulations, and the degree to which public assets can be exploited by individuals or parties. In many countries in Africa, the use and abuse of public resources are of particular concern. In former communist countries, the hesitancy to involve the state in elections is quite common, even if the state seeks to promote a more equitable system. In the United States constant debate surrounds the appropriate role of money in elections, whether soft money or hard money or funds subject to regulation at all. The complex web of interactions between government and the business sector seems to have allowed corruption to become endemic in Japanese politics. And in Latin America, campaign finance issues compete with developing the fundamental democratic institutions and processes necessary to even be concerned about how the process is financed. Once this first cut along lines of development is made, however, another world of variation comes to life. Any in-depth comparisons of campaign finance systems need to take place at the national level.

In one sense, all campaign finance systems work. Party organizations come to life, public opinion is assessed in some way, candidates and parties advertise, people participate in the process, political power is maintained or transferred, and governmental stability is enhanced a little bit more with each election. These are all indicators of a functioning democracy. Given the difficult normative questions involved, conflict about the role of money in a free society with a representative government should be expected. The variation and flux in the systems of campaign finance used around the world indicate that people are continually interested in the transparency and fairness of elections. Over time, this interest and activism helps to clarify the normative and empirical sides of campaign finance.

See also: Elections; Political Parties; Representation.

bibliography

Austin, Reginald, and Maja Tjernström, eds. Funding of Political Parties and Election Campaigns. Stockholm, Sweden: International Institute for Democracy and Electoral Assistance, 2003. <http://www.idea.int>.

Election Process Information Collection (EPIC Project). Parties and Candidates.<http://www.epicproject.org>.

Freedom House Inc. Freedom in the World: The Annual Survey of Political Rights and Civil Liberties.<http://www.freedomhouse.org>.

Williams, Robert, ed. Party Finance and Political Corruption. New York: St. Martin's Press, 2000.

Bryan Brophy-Baermann