Party finance and Political Representation

Ken McDonagh 13 April 2011

Vincent Browne has a new bugbear – party finance. In today’s Irish Times he writes: ‘The only reason anyone would give money to a political party is because they expect to get something in return’
He goes on to link the problem of private funding for political parties to the disproportionate representation of the views of the very wealthy, (to read the full article click here) however his proposed solution is neither fair nor practical.
This is due to the fact that Vincent has misidentified the problem, the transactional nature of political support is not the core of the issue – namely the willingness to donate in order to have your view represented, essentially this is the same logic as voting – the problem is the relative difference in power and influence between the very wealthy and the ordinary citizens produced by the ability of the former to use their substantial financial resources to influence policy makers.
True his proposed system would break that link between policy makers and the wealthy elite but in doing so it would also break the important link between political parties and their supporters based on the need to attract members to raise funds and organise between elections. Browne’s system would reduce parties even further in the direction of being merely electoral vehicles for individual candidates who are increasingly beholden to the state abstracted from local and/or sectional concerns.
The essence of representative democracy is that candidates represent real differences in society and compete for the political power to either implement or influence the direction of policy. Browne is correct to identify that our party system has become beholden to too narrow a cross section of society due to the influence of private and corporate donations. He is also correct to identify a ban on such donations and a turn to State funding as a solution to this problem, however by breaking the link between this funding and some measure of popular support his proposed cure may be worse than the disease.
I’ve written elsewhere on this site on how a publicly funded system could be designed that would deal with the problems identified by Browne but also maintaining a link between active membership, popular support and party financing. The essence of the system is that it would operate along the lines of the German tithe system where individuals identify themselves as party supporters via the Revenue and a fixed amount of state funding is given to that party for each supporter. That payment would also constitute a membership fee for that party.
The point is that we neither can nor should escape from the transactional nature of party support but we can and should design a system of political funding that prevents small elites from capturing the political system by exploiting the transactional aspect of politics and the inequality of wealth in society.

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4 thoughts on “Party finance and Political Representation

  1. people tend to assume that political donations are simple – x donates so many thousand euro to party y or politician z. then some special interest of x gets taken care of by politician z.

    but some bribery may be wholesale, and speculative. if donor x does not appear to get anything in return – perhaps he is performing the function of a middleman. consider the ‘bought’ politician as a racehorse. the horse wins a race (an election) and becomes more valuable. the donor then can syndicate his investment. anyone who needs something done can go to him and buy a share in the investment. so the question is, not ‘what did he get from the politician?’, but ‘what did he get from people who needed something from the politician?’.

    this way there may be no trail left for a tribunal of the future to follow. this may sound complicated, but to people who spend their days cutting each other into investments, it is a natural way to think.

  2. I agree with most of the points made above about the flaws in VB’s proposal. The voter-party link would be weakened even further by outlawing private donations. I’d suggest modifying the suggested replacement though, by requiring members/donors to be personally politically active, rather than paper donors similar to passive supporters of charities as under the German system. This would also favour parties that represent people other than the wealthy, who are less likely to bother spending their time personally campaigning on political issues.

    The big difference between party systems now and in post-war years in many countries is the decline of the class basis of parties, which has directly led to reduced personal activism. A new funding system designed to encourage parties to once again directly represent the interests of specific social groups,rather than to retain the pretence of being ‘all things to all people’ while in reality they all flog slightly different brands of neoliberal hegemony, would benefit political participation. However as this would threaten elites, there is no prospect of it ever happening.

  3. The voter party link would not be weakended by full state funding, it would be strenghtened.

    In all the arguments about why the entire system of Irish governance has failed so utterly, there seems to be little debate about the role of the public and how lazy and corrupt Irish people can be.

    Even now we see with this super auction – people are like junkies wanting their fix and delighted at the thought of another property bubble and still the policiy makers are being forced to pursue policies to rebuild house values instead of saying, prices are going to fall and fall more and that’s good. Now we need to accept that and focus on tackling the problems that fall in prices causes – not try to recreate a bubble.

    Anyone on the average wage should be able to buy a proper house on htewir own at 4 ot 5 times their salary – a house with two proper gardens and a driveway and plenty of storage space – that’s were we should be going – no more one bed falts, no more complexes in the middle of nowhere with no social infastructure.

    So if parties do not have to tap the rish for money in return for doing the bidding of the rich, then parties can do the bidding of ordinary members and their policies can reflect the needs of ordinary people.

  4. If government funding is what is needed to break the link between politics and corporations/wealthy individuals, then so be it!

    I like the basic idea of the German tithing system. It might also be a good idea to compensate politicians according to the number of voter they garnered in an election.

    But I think it would be fairly essentially to bias any such system so that smaller levels of support are disproportionately rewarded, otherwise it would tend to maintain the status quo. The Penrose voting system comes to mind here. This weights voting groups according to the square root of their population size. Entities with a smaller population receive a greater voting power than they might otherwise expect. Maybe something along these lines might not be a bad idea here. Perhaps a set fee would be paid to any elected candidate receiving more than a quota. Other unsuccessful candidates might receive a square root of the final fraction of the quota they received. So a person ending up with half a quota would receive Sqrt[0.5] = 0.71 of the funding of an elected candidate. A person only getting 0.1 of a quota would still end up with 0.32 of the full fee. Maybe too generous. If so easily adjusted. Might also be a good idea to voucher this and insist on receipts for valid election campaign expenses. Otherwise one might end up getting a small syndicate putting up a member as a candidate just to collect and share a sizable fee amongst themselves! 🙂

    I also think there should be two categories of state funding in elections: one for individual candidates, another for registered parties. A party should be able to total up all the various fractions of quotas it received in the entire country and be given funding based on this. Again don’t feel this should be strictly proportional. There should be a similar kind of bias towards smaller parties. Such a system might also encourage party formation, with independent candidates incentivized to band together to form registered political parties. This might not be such a bad thing.

    Same for any annual tithing system. I don’t feel it should be strictly proportional. But might not be an easy sell convincing long established parties that such a non-proportional funding system would be such a good idea!

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