Electoral finance refers to the electoral budget or the costs that a country incurs as a result of the various activities undertaken by EMBs and other agencies to organize and conduct an electoral process. Some electoral costs may be easily identifiable EMB costs, while others may be difficult to quantify because they are contained within the general services budgets of other government agencies. Electoral cost comparisons between countries have proved difficult, largely because different items can be identified and quantified as electoral costs in different electoral environments using different models of electoral management. The UNDP and IFES-sponsored Cost of Registration and Elections (CORE) Project divides electoral costs into three categories:
- core costs (or direct costs): routinely associated with implementing an electoral process in a stable electoral environment;
- diffuse costs (or indirect costs): electoral-related services that cannot be disentangled from the general budgets of agencies that help implement an electoral process; and
- integrity costs: over and above the core costs, which are necessary to provide safety, integrity, political neutrality and a level playing field for an electoral process.
In transitional and developing democracies, integrity costs are often largely sponsored outside EMBs, mainly by the donor community: for example, the sophisticated, internationally-funded electoral register data processing and production activities in the transitional elections of Afghanistan and Iraq. Such additional costs may not be included in analyses of EMB budgets, although they relate to functions within EMB mandates. According to the CORE Project, core costs are proportionally highest in stable democracies, as progress toward democratic consolidation tends to lead to a decrease in integrity costs and an increase in core costs. The increase in core costs results from demands for increased participation to be fostered through more widely accessible electoral operations, and from the use of 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 EMBs under the Governmental or Mixed Model, and where several government agencies may be used 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 costs related to electoral events that 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.
EMBs under the Independent Model 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 EMBs under the Governmental or Mixed Models. A higher level of readily identifiable costs may give a false impression of higher actual costs.
