Financial subsidies to political parties or to candidates for public office have been introduced in most Western democracies since the 1950s. In several nations subsidies have become a party's most important source of income. Direct financial subsidies paid to candidates or to political parties from public funds have become the norm.
Moreover, direct subsidies have been supplemented in many countries by indirect financial aid from the state. For example, candidates and parties often receive allocations of free broadcasting time during election campaigns, while candidates sometimes receive free or reduced postal facilities.
Direct financial assistance from public funds has become a staple source of financing for candidates and parties in a large number of countries. The predominant role of public financing becomes apparent when all sources of financial and in-kind assistance from the state are combined.
Administrative Implications
A system of public subsidies has several administrative pre-requisites:
- First, if financial payments are given to political parties, a legal definition must be given to the term 'party'. Without such a definition, it would be impossible to decide which organisations should receive aid. Normally, a party is defined as an organisation which has presented a stated minimum number of candidates for election and which has gained at least a minimum proportion of votes. In Germany, the qualifying hurdle to enable an organisation to qualify as a 'party' for the purpose of receiving public subsidies is to gain at least 0.5% of the national vote.
- Second, to receive public funds, a party will normally be obliged to set up an acceptable administrative structure to ensure that the grants are properly used and that accounts are kept.
Comments
Public subsidies have proven attractive to reformers for several reasons. In the wake of corruption, it has been advisable for countries to release political party organisations from the need to scramble for private or for corporate donations. Advocates of state aid to parties have argued that a system of public funding is likely to be fairer and purer. It also has the undoubted attraction to politicians and to party bureaucrats of providing a relatively assured source of income.
Public funding nevertheless has been subject to severe criticism. First, the provision of state aid has tended to increase parties' appetite for funds. Therefore it has not ended the search for additional private donations and it has not eliminated corruption. The massive corruption associated with political funding in Germany and in Italy has occurred in countries where parties have received lavish state aid.
Second, it is an illusion to suppose that state aid is likely to produce a 'fair' allocation of money between parties. It is hard enough to devise an acceptable division of free broadcasting time. The problems involved in sharing payments from the public treasury are even more intractable. 'Fairness' is an elastic concept, and it is to be expected that the governing party or the governing coalition of parties will devise a system that will be in its own interest. Moreover, legislators will have an incentive to make financial arrangements that benefit sitting members of Parliament - themselves - and which place challengers in their seats at a disadvantage.
Third, a reliance on public funds risks making parties lose their voluntary and participatory character. If party organisations become state-funded bureaucracies, they are - it is argued - likely to lose the independence which is essential if they are to play their proper democratic roles.
One response to these concerns is to limit the proportion of a party's income that it may receive from public funds. This provision has been introduced in Germany.
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