“Political finance is a vital issue for democracy, governance, and development. No matter how flawless are the country’s elections, how active its civil society, how competitive its political parties, and how responsible its local authorities, the role of money in politics undeniably influences the quality of democracy and governance. Only through greater transparency will one fully understand the extent and nature of this influence”[1]

It was in recognition of this influence that the United Nations Convention against Corruption (UNCAC) came to include an appeal that all countries should strive to “enhance transparency in the funding of candidatures for elected public office and, where applicable, the funding of political parties” (article 7(3)).

As the question of what role money plays in the affairs of political parties and the conduct of election campaigns has received increasing attention worldwide, much experience has been gathered through practical involvement, regulation or monitoring of political finance, and by scholarly attention and international assistance to such activities.

In their efforts to learn from experience, several organizations have developed lists of key lessons learned and understandings relating the issue of political finance. While each such list reflects different experiences and approaches to the issue of political finance, there are recurring themes. In the below table, the various key understandings have been categorized under common headings, and we have subsequently reached the following synthesised common understandings that have influenced the project and this publication;

1.      Money is necessary for democratic politics, and political parties must have access to funds to play their part in the political process. Regulation must not curb healthy competition

2.      Money is never an unproblematic part of the political system, and regulation is desirable

3.      The context and political culture must be taken into account when devising strategies for controlling money in politics

4.      Effective regulation and disclosure can help to control adverse effects of the role of money in politics, but only if well conceived and implemented

5.      Effective oversight depends on activities in interaction by several stakeholders (such as regulators, civil society and the media) and based on transparency 

In spite of these good intentions, much work remains to be done. Of the 136 countries that were parties to UNCAC by 1 September 2009, sufficient information is available to judge their compliance regarding candidate disclosure in 107 countries. Of these, 61 countries or 57% do not have formal disclosure requirements for the income and expenditure of candidates.[2] We also need to acknowledge the often significant gap between formal rules and practical application and note that the number of countries that de facto lack effective oversight mechanisms is much higher. Indeed, no country can be said to have finally overcome all difficulties related to political party and campaign finance disclosure.

With regard to enhancing transparency through disclosure, the first step that countries should take is to decide what their normative goals are: more informed voters, more equal footings on which parties and candidates compete, or more equitable access to politics across socioeconomic groups, for example. From this decision, reformers can envision an ideal disclosure system in terms of key regulatory dimensions: what is disclosed, who discloses, how often, and to what type of regulatory body. Finally, one must consider what requirements make sense in the country context and what will be feasible for regulators, political parties and campaign actors to live by, given the resources available to them. The process of developing these procedures should as much as possible be conducted in dialogue both with those who will be required to submit reports and with those who will be the intended users of the disclosed information (regulators, media, civil society, and ultimately the electorate).

Given that different regulatory frameworks foster different normative outcomes, there is no model political finance disclosure system. Formal political institutions have further implications for each of the key system variables, such as variation in constitutional designs and the characteristics of electoral systems. Beyond that, levels of technology, literacy, social peace, and civil society development will vary. Every context has its own set of best practices.

One aim of IFES’ study of political finance regulation has been to start thinking about practical solutions, the place of political finance reform in a hierarchy of needs, and its implications for reform priorities. Some countries may need electronic disclosure while others need more far-reaching reforms of accounting conventions. On examining the variables in disclosure systems and how they might operate in different countries, we learn that the list of best practices is fairly short. To ratify a generic disclosure law is simple. Meaningfully implementing the UN Convention against Corruption, however, requires identifying country specific goals and problems. Once those are agreed upon, reformers can design disclosure systems that maximize their goals and minimize the pitfalls.

The article above is an extract from Political Finance Regulation: The Global Experience, edited by Magnus Öhman and Hani Zainulbhai. The book draws together experiences from over 2 years of IFES work on a project funded by the United Nations Democracy Fund aimed at working towards global standards for political finance. This book is available for download on IFES.org. Print copies available upon request.