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Wouter Wolfs and Jef Smulders

In this chapter, the role and funding of political parties at the level of the European Union are analyzed. These European political parties are functionally very different from their national counterparts. They are to be considered as proto-parties, in the sense that their main task is to create a network of national parties and politicians. The introduction of EU public funding for the Europarties in 2004 was aimed at their further development: the goal was to provide the Europarties with the necessary financial means to evolve into full-fledged party organizations that are able to contribute to the development of the European public debate and political system. Together with these subsidies, the European legislator also introduced regulations on income and expenditure restrictions and on transparency and control. We find that the establishment of this party finance regime at the level of the European Union had an impact on both the EU party system at large and the organization of the individual Europarties, resulting in an evolution from a proto-party system to a fully developed party system.

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Ezequiel Martins Paz

The main intention of this text is to provide a brief overview of the Brazilian party funding system after its re-democratization, taking in consideration one specific question: have Brazilian party funding regulations reduced corruption, or simply caused it to shift form? The goal is not to formulate an ultimate theoretic answer based on empirical data, but to show in a brief critical overview how the Brazilian party funding experience constitutes a possible singular contribution to the actual academic discussions on the issue. Basically, the majority of party funding laws and regulations which are in force nowadays have their origin in the military regime. Therefore the text begins by pointing out some historical milestones of the development of the Brazilian party funding system from the start of this regime until 1985, the official beginning of Brazilian re-democratization. The text then takes a critical look at the Brazilian party funding system in the course of its re-democratization. It concludes by revisiting the opening question, namely, did the Brazilian party and electoral laws achieve the goal of reducing corruption, or did they cause corruption to change form and appearance? As is evident from actual corruption scandals, corruption is still one important option for political parties to obtain financial resources in Brazil. We have observed that the problem is not only the country’s party funding system, with its generous public distribution of money among parties, but the lack of legitimacy of the institutions, political parties and politicians which formulate the laws that regulate it. This leads us to the Brazilian party paradox.

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Michael Pinto-Duschinsky

This chapter updates the author’s previous works on British political finance to include detailed information about party expenditures (national and local, routine and campaign) in the five-year period following the general election of 2010 and ending with the general election of 2015. It also provides information on the main sources of income of the largest parties. Limitations and potential pitfalls of party accounts published by the Electoral Commission under the terms of the Political Parties, Elections and Referendums Act 2000 are discussed as well as the issue of indirect state funding of British parties, an unjustly neglected issue.

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Abel François and Eric Phélippeau

Article 4 of the 1958 French constitution only recognizes the existence of political parties without giving them an effective statute. It was not until the late 1980s that political finance regulations changed this state of affairs. Public funding was introduced and new rules were formalized. These new regulations have generated conflicts around the definition of a ‘political party’. They have also been the subject of numerous uses. This chapter goes back over the effects induced by the new regulations dealing with the finances of the French political parties. It analyzes the impacts of those regulations on different types of receipts and expenses and attempts to understand how, after being passed, the regulations have been utilized in politics.

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Asha Gupta

India is regarded as one of the biggest democracies in the world. Regular elections have been held at the centre and state levels ever since it became a republic in 1950. The Election Commission is responsible for conducting free and fair elections in India. The elections are held in phases due to the large number of voters and constituencies involved in the 29 states, and the equivalent large number of candidates. The elections in India are considered not only the largest in terms of volume, but also most expensive, beating the US $2 billion estimated to have been spent on the US Presidential election campaigns in 2016. During the past two decades, campaign expenditures rose almost tenfold. This chapter examines the party funding regime in India and discrepancies between regulations and practices – the advantage taken by candidates and political parties of various anomalies in rules and regulations, the vast discrepancies in the election expenditure declared by various political parties in India, and widespread corruption, clientelism and the politicians–business nexus are pointed out. Public party funding has been offered as a solution. However, a point to be kept in mind while debating the need for public funding in India is that it should not be done in a hurry. Though the idea of public funding is in vogue due to issues raised by media, political reformers and small candidates, in reality one should know that political money is not the only factor that determines electoral outcomes. The general political culture, economic development and past history matter a lot. Unless and until proper regulatory arrangements are made and penalties imposed, public funding cannot be effective. It is better to have provisions for direct as well indirect funding in the form of subsidies. One should not expect quick gains from public financing of political parties as its impact is usually over-estimated in public debates. Public financing, in fact, remains only one element ‘in the complex network relation’.

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Irma Méndez de Hoyos and Miguel Angel Lopez Varas

This chapter examines the party funding system in Mexico and Chile in the period 1990–2016. It analyses the evolution of the legal framework, the context of institutional changes, and its intended benefits. We compare Chile and Mexico as two cases that started the 21st century with very different party funding systems but ended up with similar rules that support generous public funding schemes that follow principles of transparency and equality and aim to end scandals of political corruption and illegal funding of party campaigns. Gradually, the singularities of the past gave way to the similarities of the present. These similarities in political finance are shared by most of the advanced democracies.

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Samuel Uwem Umoh

Universal suffrage and multiparty competitive elections are a relatively new phenomenon in South Africa, having emerged only after the country transformed from apartheid to democracy in 1994. Since then the country has experienced five electoral rounds held at the national, provincial and parliamentary levels. In the last national and provincial elections (2014), no less than 50 political parties registered and 29 actually joined the competition. This represents a significant growth in the number of system components, up from 7 parties that won National Assembly representation in 1994. Nevertheless, the party system is dominated by a single party, the African National Congress (ANC). As in other countries in Africa, such a setup leaves opposition parties little political capacity, magnified by self-fulfilling prophesies: because citizens view a vote for the opposition as wasted they refrain from voting for it, and the chances of opposition parties diminish yet further. For these reasons, adequate party funding is critical to the future of democracy. The chapter examines the political party funding regime in South Africa with particular emphasis on the 2014 Parliamentary elections. Four main aims underlie this effort: To identify sources of party funding in general and in the 2014 general elections in particular; to explain the legal provisions regulating political funding in South Africa; to examine the manner in which parties are actually funded, and the way in which parties exploit legal loopholes; to identify patterns of backsliding from the legal stipulations; and to consider how party funding relates to the consolidation of South African democracy.

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Heung Soo Sim

Party funding in South Korea is within a so-called mainstream model with a defining peculiarity. The main portion of party finance consists of state matching funds and political donations like many other developed democracies. One defining peculiarity is that political donations from business corporations and groups are strictly prohibited, as are foreign donations; and only citizens can individually donate – not directly to a political party or candidate, but to the National Election Commission (NEC) by way of deposits, which will be distributed to political parties on the basis of the following: (1) whether or not a party is qualified to form a negotiating group in the General Assembly; (2) how many seats a party holds relative to other parties; and (3) the ratio of the total number of votes a party obtained in the general election for the National Assembly. State matching funds can be classified under two categories: (1) regular yearly subsidy and (2) election subsidy in election years. The election subsidy is currently divided into three: (1) campaign subsidy; (2) public subsidy to encourage parties to nominate women candidates (since 2006); and (3) public subsidy to encourage parties to nominate candidates with disabilities (since 2010). Public matching funds are in proportion to the number of votes a party wins in a general election. In short, South Korean party funding has taken the route which is exactly opposite to the American one in terms of whether ‘money talks or not’. The first section of this chapter traces major evolutionary changes in Korean party finance. The chapter pays particular attention to critical junctures and nodules that shaped the development of party funding. It describes the foundation of political finance and then explicates the rationale behind the evolutionary path and trajectory, that is, to trace how and why they have taken the shape that they once were and they currently are. In the second part, this chapter opens up the current party funding system for a detailed analysis. It argues that the evaluations of the current party funding system in South Korea stand at opposite end of the continuum to the United States; that is, the political voice coming from money is highly restricted in Korea whereas it is unlimited in the United States. The system appears to be clean in a formal sense, but people still do not believe that high politics in an informal sense is as clean. The system values efficiency but at the expense of highly restricted political markets. The system achieves equal opportunities for every party but peoples’ will is not translated into donations of money. Businesses and groups cannot voice their collective views. In the name of accepting the lesser evil, the regulations of money in political market artificially suffocate the natural flow of political life: communication.

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Fernando Jiménez and Manuel Villoria

The Spanish case is interesting for two reasons. First, the restoration of democracy in Spain took place at a time (1970s) when the emergence of mass parties was very unlikely. Spain is ahead of the rest of Europe in terms of the growing trend of citizens to distance themselves from political parties. Spanish party organizations have had the lowest membership levels in all of Western Europe. This made the problem of financing the parties more than evident from the outset in Spain. Second, the financing system chosen in Spain, a mixed system of public and private financing, is the most common amongst European countries, although it is true that the weight of public funding is higher in Spain than in most of her neighbours. The chapter describes the Spanish party funding system and analyses its main weaknesses. Corruption scandals linked to the illegal funding of parties in Spain have happened frequently even though there have been four major reforms in its legal framework (1987, 2007, 2012 and 2015). Despite the clear improvements brought about by the reform of 2015, there are still serious flaws in the regulation. It is still clear that parties have decided not to restrain themselves enough so as to avoid the temptation of obtaining funds in a questionable or outright illegal manner. The challenge lies in how to implement an effective reform when regulation depends on those that are regulated, and the latter have few incentives to implement such a reform. Pressure from international entities like GRECO, the emergence of new political formations that are aware of the need to self-limit and enhance funding transparency and, above all, pressure from citizens, associations and the media are all key factors for doing away with the current abuses and, as a result, reducing the risks of corruption in political funding.

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Shih-Hsien Chang

This chapter highlights the genesis and development of the laws framing the financing of the political parties, thanks to the three party alternations in 2000, 2008, and 2016. Political parties have struggled for more political equality and justice with each other to amend current laws or make new laws in Taiwan. The content of this chapter includes the negative and positive measures for party financing and lessons from Taiwan.