Money in Politics: Can’t Experience Teach Us Anything?

My complaint in last week’s post that Checkbook Elections, the recent study of campaign and party finance rules in 11 countries, failed to offer any guidance for reformers drew a sharp and quick retort from University of Sussex researcher Samuel Power.  Power says I didn’t like the study because it didn’t produce a “one-size fits all” solution to the problem of controlling money in politics.  That search for the holy grail of campaign and party finance is misguided, he says, for reforms are context specific.  When a reformer, Power writes, asks a money-in-politics guru “. . . for ‘guidance on what works,’ the (sensible) answer is very likely to be ‘well it depends. . . .’”

But depends on what Mr. Power?  Climate?  Latitude?  Ethnolinguistic  fractionalization?  My problem with Checkbook Elections is not that it doesn’t offer a universal solution to the problem of money in politics.  My problem is that it doesn’t provide even a hint of what matters when tackling the problem despite a rich history from which lessons can be drawn.  One example: One would never know from reading Checkbook Elections how important it is to know the size and strength of political parties before requiring parties to disclose their finances — that in some cases transparency does far more harm than good.

One of the first warnings about the dangers of making political funding transparent comes in Buckley v. Valeo, the 1974 case where the U.S. Supreme Court approved sweeping changes to the way campaigns for the Presidency, the Senate, and the House of Representatives are financed.  The heart of these post-Watergate reforms was the requirement that both candidates and the parties supporting them disclose all contributions over $200 and all expenditures.  The law was challenged on the grounds that disclosure put a burden on candidates and parties without any offsetting benefits.  In rejecting that challenge, the Court identified several important benefits including the deterrence of corruption.  It therefore upheld the law’s disclosure obligations.

But it did so with an important caveat.  In the case of smaller parties it found a countervailing interest that trumped the benefits of disclosure. Citing a case where it had denied a state government with a history of animosity against African-Americans access to the membership list of a civil rights group, the Court ruled that, for smaller parties advocating unpopular causes, there is a chance that if the names of their contributors and those from whom they purchase goods and services are disclosed, these individuals and firms would be subject to harassment or reprisals.  The Court thus carved out an exemption for small parties whenever harassment or reprisals was a possibility, an exemption that one small party that perennially runs candidates for federal offices continues to enjoy to this day.

The possibility that donors and vendors to small parties will be harassed or subject to reprisal if their identity is revealed is not only a concern in the United States.   Many nations that won their independence in recent years remain under the control of the party that led the independence drive.  As Michael Johnston notes in his cautionary tale of political finance regulation, for these nations, a — if not the – critical step in their political development is the growth of strong opposition parties, a step that dominant parties naturally look askance at.  Not surprisingly, in many countries it is the dominant party pushing — often with the help of groups like those behind Checkbook Elections — laws requiring all parties, no matter what their size, to fully disclosure their finances.  As I was told in one country where this was the case, enactment would ensure the dominant party would never lose an election.  For the very reasons the American Supreme Court cited in Buckley, my interlocutors told me small parties will find it impossible to raise significant sums to contest the election, and “anyone printing campaign posters for the [x] party would never do business with the government again.”  The latter is a particularly significant consideration in that country as government is the major source of business for printing companies.

My disappointment with Checkbook Elections is that it fails to alert those seeking to reform their nation’s party and campaign finance laws to pitfalls such that arising from requiring disclosure by small parties in states where one party is dominant.  Yet this is an obvious lesson to draw, certainly from the U.S. experience, and perhaps from others’ experience as well.  Might one hope for a follow up a volume from Checkbook Elections’ authors?  One that will include the lessons of experience.  I am not asking for a “one-size fits all” solution.  But it would be nice to provide those wanting to address the problems of money in politics with a list of informed questions to ask before they plunge ahead.

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