Party Finance

Problems of Party Finance

Party finance raises problems for three main reasons. First, parties with access to disproportionately large amounts of money for their election [Page 1804]campaigns potentially have a large advantage over poorer rivals. Insofar as high expenditure enables parties to gain votes, money may create unfair electoral advantages for parties with rich supporters. In a considerable number of countries in the Third World (including Thailand, the Philippines, and countries in Latin America), vote buying is a common feature of elections. In Nigeria, electoral officials reportedly have been bribed to falsify voting results. In countries such as the United States, money is characteristically spent on buying advertising time on television. Studies on electoral results in congressional elections in the United States and in parliamentary elections in the United Kingdom (UK) have suggested a clear link between the amount spent and the number of votes obtained.

A second problem is that parties' need for money may make them reliant on donors who demand illegitimate benefits. Typically, these consist of public contracts, licenses, or legislation favorable to the givers. The demand for donations is a major cause of political corruption, both at the national and at the local level. Major scandals concerning party funding occur so regularly that any attempt to list them will soon be outdated. Scandals not only involve justified accusations against politicians and their aides but also unfounded but nevertheless powerful allegations.

Third, those desiring to become candidates for public office may need to spend considerable sums in obtaining party nominations. Primary elections and other internal party contests can be costly for those involved. The more expensive it is to gain a party nomination the lower will be the chances for persons without private resources to embark on political careers.

It is not only the demand for resources that affects political parties; the control of money has a significant impact on the structure of power within political parties. Robert Michels stressed in his classic study of the German Social Democrats in the early 20th century that party leaders tend to gain control of the purse strings of the party and that this has the effect of centralizing power. There is no single pattern of internal control over funding. In some countries, such as the United States, central party organizations do not have an overwhelming control where it comes to raising and spending money.

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