There are compelling reasons why parties and candidates need to be regulated, but equally strong reasons why the complexity, burden, and cost of the regulations should be limited.
The Need for Regulations: Basic Considerations
First, political organizations such as parties, as well as individual candidates for elective office, are, and need to be, subject to the ordinary laws of the land. If a party official steals money from party funds, or if a candidate commits a physical assault, they cannot be immune from the ordinary laws relating to theft and to violent behaviour. Similarly, political parties are subject, like other organizations, to the relevant laws and regulations relating to the payment of taxes.
Second, in countries where parties have a special role in the electoral process - as in those with list systems of proportional representation - the status of parties needs to be regulated.
Third, the fact that parties compete in elections means that confusion is likely, unless each party has a right to protect its name and (if relevant) its logo or symbol from imitators. Such protection is the equivalent in the field of competitive elections to the protection given in the field of business to company trademarks and symbols. In the marketplace, lack of trademark regulation will result in the risk that consumers will accept shoddy goods that are packaged and marked to give the impression that they are the genuine article. In politics, unknown candidates and unpopular parties may - unless regulated - seek to gain votes by adopting the names, symbols, and colours of popular ones.
Fourth, where financial assistance, subsidies-in-kind (such as free access to television), or other special privileges are given to parties and candidates, it is necessary to define and to regulate the organizations and individuals to whom such benefits are given. For example, if donations to political parties have tax benefits, what is to stop all variety of organizations calling themselves 'parties' merely to take advantage of such provisions? The only way to enable genuine parties and candidates to receive public funding and other benefits is to define and to regulate them.
Basic Arguments against Over-Regulation
While some limited degree of regulation is vital, the freedom and vigour of political activity makes it desirable to restrict the scope of regulations as far as is practical.
First, even where regulations are intended to produce a level playing field, there is the underlying danger that they will benefit some parties at the expense of others. With the best will in the world, it is hard to devise neutral regulations. In fact, the ruling authorities of the day make the regulations, and these authorities (whether they consist of a dominant leader, a party, or a coalition of parties) will be tempted to devise regulations that have an appearance of fairness, but which actually work to their own advantage.
Second, regulations may be extremely costly. In some countries the public funding of political parties has reached alarming proportions. Electoral administration does not come cheap, either.
Third, and this point is more controversial, where parties are highly regulated and subsidized, they have a tendency to become excessively bureaucratic. In some countries, such as Germany and Austria, there have been complaints of a 'party-state'. In other words, political parties are so closely regulated, and so heavily subsidized, that they are more like government departments than independent organizations. They are more dependent on state subventions than the services provided by ordinary party members.
Extensive restriction on campaign practice, including penalties, while ostensibly to punish illegal activity and make elections fair, can be used (misused) to favour incumbent reelection by making it difficult for new candidates to get their name known to their voters.
See also Regulation/Oversight of Political Parties, Regulation/Oversight of Campaign Finance, Regulation/Oversight of Campaign Activities and Administrative Implications.
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