An indirect form of regulating paid political advertising in many countries is a limit on campaign spending. Such limits apply widely and, since television advertising will usually be the largest item in the campaign budget, it is here that the most impact will be felt. In Canada, for example, spending limits mean that parties can never use up their allotted share of advertising time. Sometimes these limits are made explicit by law. In the 1994 South African election, for example, it was stated that all political advertising was subject to any legal limitations on campaign spending.
Venezuela, estimated to have the highest per capita spending on political advertising in the world, not surprisingly has no limit on spending. The United States, generally regarded as the home of political advertising, has a fairly complex system to regulate campaign financing, especially in presidential elections. The 1971 Federal Election Campaign Act (amended in 1974 and 1976) established equal federal financing of presidential elections and federal subsidy of primaries. It also set ceilings on what candidates could spend on TV advertising, although these were removed when the law was amended. In an important 1976 case - Buckley v Valeo - the Supreme Court upheld the principle of public financing but struck down limits on spending by 'political action committees' if these were independent from the presidential campaigns themselves. The court also decided that there would be no limit on spending by individuals.89
The effect of this is to create routes whereby presidential campaigners can bypass the limitations. Donors can give money to parties or political action committees rather than to the candidates themselves - a function of the unusual US practice whereby the candidate stands independently of the party he or she represents. It also means that a wealthy individual, such as the independent Ross Perot in 1992, can stand without any spending cap at all.
All political advertisements in the United States must carry a disclaimer indicating who paid for them.90
Japan is another country that makes the distinction between parties and candidates in its control of campaign spending. Candidates themselves are not permitted to buy broadcasting time. Parties on the other hand can buy advertising time, provided that their advertisements call for support for the party, not for specific candidates. See Formulas for Allocating Time.
Controls on campaign finance can be used as a means of giving opportunities to poorer parties in an environment of paid advertising. In Mongolia's first parliamentary elections, for example, each party was allocated the same amount of free and paid time. But the government subsidised the paid time of the smaller parties.
It is sometimes proposed that this 'topping up' option be used to equalize campaign spending - as a way of enforcing spending limits but not in a heavy-handed manner. The idea would be that limits are set. If one party exceeds them then the others would receive a top-up out of public funds.
