{"id":86,"date":"2015-01-25T21:12:01","date_gmt":"2015-01-25T21:12:01","guid":{"rendered":"https:\/\/scscsussex.wordpress.com\/?p=86"},"modified":"2015-01-25T21:12:01","modified_gmt":"2015-01-25T21:12:01","slug":"political-parties-public-funding-and-unintended-consequences","status":"publish","type":"post","link":"https:\/\/blogs.sussex.ac.uk\/centre-for-the-study-of-corruption\/2015\/01\/25\/political-parties-public-funding-and-unintended-consequences\/","title":{"rendered":"Political Parties, Public Funding and Unintended Consequences"},"content":{"rendered":"

As has been discussed previously on this blog<\/a>\u00a0and elsewhere<\/a>, party finance reform \u2013 notably an increase in public funding \u2013 is an increasingly popular response to the myriad of financial challenges that political parties face in the 21st<\/sup> century. The advantages and disadvantages of state funding have been discussed at<\/a> length<\/a> by academics, practitioners and politicians alike, with perhaps the biggest \u2018pro\u2019 being that it provides the opportunity to rid (or at the very least limit) politics of the undue influence of so-called special interests and wealthy donors. Michael Koss<\/a> takes this argument a step further by showing that an increase in state funding becomes more likely \u2018the more the discourse on political corruption identifies state funding as a remedy against corrupt practice in party politics\u2019. Whilst these arguments are undoubtedly (at least to me) fascinating, what is also interesting about party funding reform \u2013 and, indeed, reform more generally \u2013 is the unintended consequences that are thrown up when reform occurs.<\/p>\n

An example of this forms the basis of a new study<\/a> by Harvard based PhD candidate Andrew B. Hall<\/a>. In a study of five state legislatures \u2013 Arizona, Connecticut, Maine, Minnesota and Wisconsin \u2013 which have strong public funding programmes, or \u2018clean election laws\u2019 (the name is, perhaps, instructive of the motivation for implementing said reforms), Hall came up with\u00a0three key findings. Firstly, as expected (and intended), public funding reduced the financial advantage of incumbent politicians. Secondly, and also as expected (and intended), public funding made elections more competitive. Finally, there was also an unintended consequence, the increase in public funding makes polarization in the state legislature worse. That is to say, legislation that introduces a robust public funding regime creates a disadvantage for moderate party candidates. The reason for this is that individual donors and what Hall calls \u2018access oriented interest groups\u2019, donate money in different ways and for different reasons.<\/p>\n

The work brings to mind that of Iain McMenamin<\/a> who shows that, in terms of business financing of political parties, \u2018money is multi-lingual\u2019. Donations can be either ideological or pragmatic (for a review of McMenamin\u2019s 2013 book, see here<\/a>). Ideological donations are donations to a specific party which holds some form of ideological affinity with the donor, whereas pragmatic donations are given without any notion of political affiliation, just to the party which is perceived to hold the most power. In the American context, Hall shows that we can understand \u2018access oriented interest group\u2019 donations as largely falling into the latter category which, intentionally or not, tends to favour more moderate candidates. Individual donations, however, fall into the former category, which tends to favour polarising candidates. This is because, unlike pragmatic interest groups, individual donors are much less likely to spread their donations across candidates of different parties, to ensure some form of influence (perceived or otherwise). Individual donors are much more likely to donate to those for whom they have a strong ideological affiliation, who also tend to be on the polarised end of the political spectrum. Therefore, funding reform which introduces significant state subsidy, limits donations from \u2018access oriented interest groups\u2019 and privileges individual donations, increasing polarisation in the state senate.<\/p>\n

The findings also represent a much larger discursive point when engaging with corruption more generally. There often exists an unspoken dichotomy between acceptable and unacceptable influence. That individual donations are a positive sign of a functioning and vibrant democracy despite the fact that they may lead to \u2018a polarized, and probably less functional politics\u2019<\/a>. Whereas special interest donations (from \u2018access oriented interest groups\u2019) tend to represent everything that is wrong with modern democracy and some sort of pervasive, shadowy, Bilderberg-esque influence over politicians \u2013 who have little interest in actual, y\u2019know, public service preferring to make as much money from politics as possible before retiring to a cushy job in the private sector. The reality, of course, as these findings show is a little more complicated than this \u2013 no reform is perfect, democracy is messy and a trade-off will have to occur.<\/p>\n

Beyond this is also the notion that donations are almost intrinsically corrupt if the group donating \u2013 or indeed the person being donated to \u2013 represents something that one does not agree with. There often seems to be a fairly thin line between what represents a corrupting influence and what does not and that line tends to be drawn alongside some form of normative political judgement. One man\u2019s lobbyist (yuck!) is another man\u2019s advocacy group (hooray!).<\/p>\n

This was further shown by reports<\/a> at the end of 2014 that a new study had tried to answer the question of whether power actually corrupts. One of the lab experiments is described by a co-author of the study as follows:<\/p>\n

\u201cParticipants played what is called a dictator game. The dictator, referred to as the \u201cleader\u201d in the experiment, could decide how to apportion a sum of money between himself or herself, and his or her team. They had to make choices between serving the greater good \u2013 doing what\u2019s right for public welfare by increasing the team\u2019s payout \u2013 or serving oneself, thereby increasing the leader\u2019s payout but destroying public welfare.\u201d<\/p>\n

The problem here is that the act of selfishness, and to a certain extent hypocrisy, is being (mis)taken to be a necessarily corrupt act. Furthermore, not serving the greater good is also seen as representative of a corrupt act. A person in a position of power (who I may or may not agree with) acting selfishly and not serving the greater good is not necessarily committing a corrupt act, just as a special interest group (who I might not agree with) donating a large sum of money to a politician (who I might not agree with) does not necessarily represent a position of undue influence. That is not to say that the action (or exchange) is desirable, but it is to say we should be wary about screaming (insert expletive of choice) corruption whenever we are presented with something that we disagree with.<\/p>\n

To return to the study to hand. The work of Andrew Hall is interesting for two reasons. Firstly, it shows us that, at least in the context of the USA, an increase in state funding (at the expense of private funding) leads to certain interesting and unintended consequences. However, American politics is nothing if not exceptional, so I would be curious to see if these findings hold up in other contexts \u2013 particularly in the advanced industrial democracies<\/a> of Western Europe. Secondly, the work of both Hall and McMenamin raises broader theoretical questions about what should \u2013 and\u00a0 should not \u2013 be considered an illegitimate, or indeed corrupt, exchange. It is by engaging with this literature and building on it ourselves that we can draw these lines in an ever sharper way.<\/p>\n

Sam Power<\/p>\n

University of Sussex<\/p>\n","protected":false},"excerpt":{"rendered":"

As has been discussed previously on this blog\u00a0and elsewhere, party finance reform \u2013 notably an increase in public funding \u2013 is an increasingly popular response to the myriad of financial challenges that political parties face in the 21st century. The…<\/span><\/p>\n

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