Electoral finance refers to the electoral budget or the costs that a country incurs as a result of the various activities undertaken by the EMB and other agencies to organize and conduct an electoral process. Some electoral costs may be easily identifiable EMB costs; others may be difficult to quantify, contained within general services budgets of other government agencies. Electoral cost comparisons between countries have proven difficult, largely due to the different items that are able to be identified and quantified as electoral costs in different electoral environments, using different models of EMB. The UNDP- and IFES-sponsored Cost of Registration and Elections (CORE) Project divides electoral costs into three categories:

• core costs (or direct costs): are those costs routinely associated with implementing an electoral process in a stable electoral environment;
• diffuse costs (or indirect costs): are those costs for electoral-related services that cannot be disentangled from the general budgets of agencies that assist with the implementation of an electoral process; and
• integrity costs: are those costs, over and above the core costs, that are necessary to provide safety, integrity, political neutrality, and a level playing field for an electoral process.

See table on “Attributes of Electoral Core, Diffuse and Integrity Costs” on the dynamic bar.

Integrity costs are often largely sponsored outside the EMB and mainly by the donor community; recent examples are the sophisticated internationally funded electoral register data processing and voter list production activities in the transitional elections of Afghanistan and Iraq. Such additional costs may not be included in analyses of EMB budgets, though they relate to functions within the EMB’s mandate. According to the CORE Project, core costs are proportionally highest in stable democracies, as progress towards democratic consolidation tends to lead to a decrease in integrity costs and an increase in core costs. The increase in the core costs results from demands to foster increased participation through more widely accessible electoral operations, and the use of high technology to expedite voter registration, voting, and the transmission of election results.

The CORE Project further shows that diffuse costs tend to be higher in stable democracies, especially in Western Europe, where electoral processes are more likely to be implemented by Governmental or Mixed Model EMBs which may use several government agencies to implement electoral services. Where, for example, a national civil registration agency is responsible for providing electoral register data, as in Hungary and Norway, it incurs electoral-related costs which may be difficult to separate from overall civil registration costs. Even where governments have a policy of ‘cost recovery’ for governmental agency electoral services, the true cost may not be charged.

Independent Model EMBs are more likely to have sole responsibility for electoral functions, and thus have a higher level of readily identifiable direct costs, and a lower level of diffuse costs than Governmental or Mixed Model EMBs. A higher level of readily identifiable costs may give a false impression of higher actual costs.