Party finance and government regulation, a comparative analysis

Abstract

Political parties and candidates need money for their activities. How to provide the necessary funds is a problem in most countries with a democratic system of freely competing political forces. Different approaches to a solution have been tried in the various countries, but no systematic study could be found which tried to evaluate the suggestions and experiments in a comparative way. Emphasis in this study was put on the situation in Germany and the United States where the problem of political finance has been in the center of legislative and court action in 1966. Evaluations made in other countries, especially in France, Great Britain and Japan, have been included, wherever possible, in order to show the variety of theoretical and practical solutions.! The study was limited, however, by the availability of published material.

In Chapter I, the regular sources of party funds will be examined. Most generally, parties and candidates have to rely upon private sources, especially membership dues and contributions. Increasing electorate and modernization of propaganda techniques, however, have enlarged the financial burden. Private funds have often become insufficient, despite the parties' reliance on sometimes dubious and even illegal sources. Instead of broadening their financial base by winning a large number of small contributors, most parties have followed the easier way of securing the help of a few wealthy contributors.

Left to themselves, political parties often developed abuses and illegal practices in their financial activities. Many governments interfered by imposing legal restrictions. This problem will be discussed in Chapter II. In most countries, legislative safeguards include provisions against corruption. Limitations of contributions to and expenditures by parties and candidates, as well as requirements for the disclosure of financial activities, are prescribed in only a small number of countries.

In Chapter 111, public subsidies to political parties and candidates will be evaluated. Most governments have taken over some political costs, mainly in connection with voter registration and poll administration. Some have gone further and helped the parties and candidates defray part of their costs for specific kinds of propaganda. Only a few countries have gone so far as to give general financial aid to the parties and candidates, either in the form of tax benefits or of direct subsidization. This kind of government support is heavily disputed, especially in Germany and the United States. Some suggestions seek a solution to the problem by combining private and public sources of political finance.