Party Finance Essay ⋆ Political Science Essay Examples ⋆ EssayEmpire

Party finance refers to all funds spent in order to influence the outcome of party competition, be funds expended on individual election campaigns for any public office, or on the maintenance of party organizations, nationally and in the field. This includes all funds raised from individual citizens, interested money (e.g., businesses or trade unions), public subsidies or—occasionally even—corrupt exchanges. The term campaign funds—preferred by many American authors—is too narrow for cross-national analysis. Alexander Heard’s 1960 text, The Costs of Democracy, highlights the expense side of the subject. Many scholars have also studied the notion of political financing. In particular, Arnold Heidenheimer, Khayyam Paltiel, Herbert Alexander, and Arthur Gunlicks advanced cross-national comparisons.

Political Spending

The concept of political party helps to identify the manifold orbit of political competitors, and party finance offers a term to summarize or aggregate all items of expenditures on political competition. Although most dimensions of political spending (e.g., a variety of campaigns, a party organization with national headquarters and local chapters) are common to all democracies, detailed features are quite specific. The mix of voluntary party workers and paid staff, expenses for offices, and public relations and communication vary considerably and data are rather patchy.

Among the democracies for which the costs of political competition can be established, there is a considerable spread of per capita spending totals for party competition. Austria, Israel, Italy, Japan, and Mexico spend about ten times as much as Australia, the United Kingdom, and the Netherlands, as illustrated by Karl-Heinz Nassmacher in The Funding of Party Competition. Many democracies operate at an intermediate level of political spending, including Canada, Denmark, France, Germany, Ireland, Poland, Spain, Sweden, Switzerland, and the United States. Most countries have not changed their level of political spending in about five decades.

The earlier a democratic government was established, and the more a country can afford economically, the less likely it is to spend much on its democracy. Party activity in (majoritarian) Anglo-Saxon style democracies is less expensive than it is in the multiparty (consensus) democracies of continental Western Europe (and in non-Western countries). Generous government expenses and government regulation of the economy go along with higher party spending.

Many observers believe that paid TV advertising, new campaign technology, or a growing party apparatus with fulltime staff have caused unavoidable financial needs. Per capita expenses for some decades, however, reveal that current levels of political spending fall short of earlier peaks. Competing parties may sink lots of money into new items just because they can afford to do so—due to citizens’ generosity, public subsidies, or corrupt exchanges.

Party Revenue

Popular financing can be an important source of political revenue, but it is not a constant and reliable one. Just like voters, party members and small donors are volatile sorts of citizens. Grassroots revenue will never suffice to cover all costs of politics. However, this source of funding can supply large amounts if parties and candidates put in some organizational effort. Various alleys have been explored successfully to raise voluntary contributions from individuals: recruiting party members, direct mail drives, neighborhood solicitation, lotteries, and social events at the local level.

The free flow of money into political competition is both a hazard and a necessity for democratic politics. The financial support of policies, politicians, and parties is an expression of economic and political freedom. However, as plutocratic financing, influence peddling, and corrupt exchanges happen, the flow of political funds needs transparency. In most democracies, cash contributions from trade unions, which are rare in many countries, as well as contributions from the business community (i.e.,“corporate donations”) have declined and are widely substituted by public funding. Public disincentives to discourage the flow of interested money into political competition (e.g., disclosure, limits, and bans) reinforce this trend. However, there are still relevant cases of political graft, among them the abuse of public resources for partisan purposes and the extortion of private business.

In general, public subsidies are neither a mere stopgap nor an all-purpose solution to funding problems. Some countries apply rules to enforce the legitimacy of this source of political revenue, especially the matching principle, while others issue a specified responsibility for transparency. Very few modern democracies forgo state aid as a means of political funding. Party organizations, caucuses, or candidates receive public support. There is indirect funding (i.e., subsidies-in-kind and tax benefits) as well as cash aid. If subsidies are allocated, access needs to be fair and distribution takes party size into account. Taxpayers in Europe and non-Western democracies provide higher amounts toward party activity than Anglo-Saxon countries. Many party headquarters cover between 40 percent and 60 percent of their annual budget via public grants.

Impacts

If money is a means to succeed in political competition, the candidate who, or party which, is able to spend the most should be the winner—at least most of the time. However, empirical data does not consistently support this plausible hypothesis. The same applies to the more sophisticated theory that public subsidies lead to an ossification of the party system. New parties have entered the party system in many democracies. Established parties have lost and gained electoral support with and without state aid. An arrested distribution of power between parties of government and parties of opposition has occurred solely in Japan, but not in Austria, Germany, Israel, Spain, or Sweden—which, due to a high level and long duration of public subsidies, are the likeliest candidates for such suspicion.

Traditional sources of political revenue such as membership dues and small donations provide linkage between parties, candidates, and their local supporters. Public subsidies are expected to interrupt these links. The most important evidence on both sources of income is that public subsidies have not destroyed grassroots linkage across the board. Available data suggests that the present situation is more mixed than a one-dimensional cause-and-effect relationship suggests.

In general, there is a shift of party activity toward professional operation at the center and in the field. As a consequence, the distribution of power within party organizations will continue to move toward all units that wield the purse strings, especially those able to raise additional funds—be it from individual supporters, corporate donors, public funds, corrupt exchanges, or by assessment of officeholders.

Bibliography:

Alexander, Herbert E., ed. Comparative Political Finance in the 1980s.
Cambridge: Cambridge University Press, 1989.
Alexander, Herbert E., and Rei Shiratori, eds. Comparative Political Finance among the Democracies. Boulder:Westview Press, 1994.
Austin, Reginald, and Maja Tjernström, eds. Funding of Political Parties and Election Campaigns. Stockholm: International IDEA, 2003.
Casas-Zamora, Kevin. Paying for Democracy: Political Finance and State Funding for Parties. Colchester, U.K.: ECPR Press, 2005.
Gunlicks, Arthur B. Campaign and Party Finance in North America and Western Europe. Boulder:Westview Press, 1993.
Heard, Alexander. The Costs of Democracy. Chapel Hill: University of North Carolina Press, 1960.
Heidenheimer, Arnold, ed. Comparative Political Finance: The Financing of Party Organizations and Election Campaigns. Lexington, Mass.: D.C. Heath, 1970.
Nassmacher, Karl-Heinz.The Funding of Party Competition: Political Finance in 25 Democracies. Baden-Baden, Ger.: Nomos, 2009.
Paltiel, Khayyam Z. “Campaign Finance: Contrasting Practices and Reforms.” In Democracy at the Polls: A Comparative Study of Competitive National Elections, edited by David Butler, Howard R. Penniman, and Austin Ranney, 138–172. Washington, D.C.: American Enterprise Institute, 1981.

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