Money moves politics, and it can rot it. The funding of political activity is a key issue for good governance and for fighting corruption, according to GSDRC, a research service that collects the literature on the subject. It is also a complex moral and legal question.
Controls on the table
Many controls have been suggested to curb corruption in political finance. They include public financing of parties and limits on contributions, spending and campaign time. Full public disclosure of party accounts is increasingly demanded, yet little legislation exists to enforce it. Any of these controls depends on effective monitoring bodies.
A 2005 study by the National Democratic Institute looked at party financing in 22 countries. It called corruption tied to party financing a serious threat to democracy and economic development. Donor-backed legal reform against that corruption, it said, will only work if enforcement is adequate and parties also work on accountability and internal democracy.
Africa’s mix of sources
A 2008 GSDRC helpdesk report listed the main methods of party financing in Africa: individual donations, private sector donations, public funding and foreign donations. Each has advantages and drawbacks. The report said a combination of private and public money is generally considered beneficial, with private funding regulated through disclosure rules and possibly a cap, and public funding allocated equitably.
When the voter is the target
Most of the literature assumes the main risk is that donors gain improper control over politicians. The reverse happens too. Vote buying is widespread in many developing countries.
A 2014 study by Jensen and Justesen, using survey evidence from Africa, found that poor voters are more likely to be targeted for vote buying than wealthier ones, and that the effect grows when elections are highly competitive. A 2013 World Bank paper by Hanusch and Keefer argued that politicians lean on vote buying when they are less credible. Banning it, the paper said, lowers the welfare of the people targeted but improves it for everyone else.
Illicit money
A 2009 discussion paper for International IDEA by Kupferschmidt called illicit political finance a key contributor to the underperformance and loss of credibility of democratic governments. It urged international actors to help transitional democracies understand the problem, raise awareness, build tools to defend key institutions and, where appropriate, create new laws and institutions.
A 2001 paper from Britain’s Department for International Development said party financing can distort elections and is a major motive for corruption in both developed and developing countries. In poorer countries, it said, the pressure for corrupt money comes from a lack of legitimate sources and from anti-democratic practices such as vote buying.
International IDEA keeps a database on political finance rules in 179 countries. It answers 43 questions on donation sources and limits, public funding, spending, and reporting, oversight and sanctions.
