Political party financing can distort the electoral process and is a major motive for corruption in both developed and developing countries. What are the links between corruption and political finance? This paper by the UK Department for International Development tackles this question, discussing solution options and action strategies. The pressures for corrupt financing in developing countries are related to the lack of legitimate sources of finance and to various anti-democratic party activities, such as vote buying. Corruption can occur in both multi-party and single party election systems. Under both systems the electorate can develop the expectation that their vote will be bought.
The pressures on parties to raise money increases the power of interest groups and individuals to influence party behaviour in exchange for financial support. Ruling parties may also abuse their access to state resources, putting opposition parties at a disadvantage.
There are two major links between corruption and political finance that are associated with competitive elections. The first link is the demand of the electorate for payment for their votes in terms of private and public goods. The second is campaign finance corruption in which government actors divert state resources to their own campaigns, or where candidates sell political influence. Other findings of the paper include:
- Attempts to tackle the problem of party political financing have followed two main routes: Regulation and financial subsidies
- Although countries may have a number of laws in place during elections, designed to prevent buying the electorate’s votes, at times these may be unenforceable
- The policing of party financing is difficult even where there are regulations and independent electoral commissions. The effectiveness of the process depends on the commitment of the main political parties and the electorate to more ethical behaviour.
There is no consensus on the most effective measures for tackling the abuses of party financing. The measures currently in place are related to the type of democratic system. Countries with first-past-the-post systems favour regulation, while those with proportional voting systems favour subsidies. The paper suggests that:
- Within developing countries, effective regulatory frameworks should be developed with clear rules and legislation on political party funding. These frameworks might include limits to party finance, disclosure of funding sources, contribution limits and bans on foreign donations
- Support should be provided to electoral commissions and civil society
- Although state financing has its risks, clearly desirable subsidies include access to state media or direct public funding for activities such as policy research
- Civic education, improved advocacy and political organisation could change poor people’s demands of politicians for honest and effective public services in place of vote- buying
- At the international level, the objectives should include actions to introduce constraints on bribery that originates from developed countries and goes into politics in developing countries
- More research and dissemination of the results is needed in the area of political party financing and its links with corruption.
