Today’s guest post is from Dr. Sergiu Lipcean of the University of Bergen and Professor Iain McMenamin of Dublin City University.
Does public funding of political parties reduce corruption? Intuitively, there are good reasons to believe that it does. After all, when parties receive a substantial portion of their funding from public sources, they are less dependent on private contributions—both legal and illegal. That straightforward logic has led many scholars and prestigious organizations to recommend higher levels of public funding for parties and candidates. The Council of Europe’s Committee of Ministers, for example, recommends public funding of political parties and electoral candidates as an anticorruption measure, and the OECD, while not explicitly using the language of corruption, recommends public funding as part of a holistic system of political finance regulation to limit policy capture.
But the empirical evidence on the anticorruption impact of public funding for parties is surprisingly thin, and results that initially seem to show the sort of effect described above often turn out to be quite fragile and unreliable. We recently published our own study, which examines how the level of public funding for political parties affects enterprise managers’ perceptions of the impact of payments to government officials, using World Bank survey data from 27 post-communist countries. Although we find an association between higher public funding and lower corruption, this result is extremely sensitive to minor changes in method, and the results are too uncertain to recommend public funding as a policy intervention to reduce corruption.
We suspect that one of the reasons that empirical research has failed to find robust anticorruption effects of public funding is that many of the unlawful payments to politicians are used for their personal consumption, rather than for political purposes. As noted above, the economic logic of the view that public funding reduces corruption is that if parties can rely more on public funding for election campaigns and other legitimate political expenses, they will be less tempted to accept bribes, because they will have less need to fill their campaign coffers with dirty money. But if much of the illegal money given to politicians is used for their personal gratification, rather than for political purposes, than public funding of campaigns will not have much of an effect.
This is not to say that countries should not significantly increase public funding of political parties. Corruption is enormously damaging, and even very high levels of public funding for parties are unlikely to have much impact on most national budgets, so even the possibility that significant public funding might reduce corruption, at least in some contexts, may make this investment of resources worthwhile, even if we lack strong direct evidence of effectiveness. And of course there are many other reasons, besides anticorruption, to favor public funding of political campaigns. That said, an honest appraisal of the existing research compels the conclusion that, to date, the evidence that public funding will substantially reduce corruption is weak and speculative, and we should therefore not get too excited about its potential as a general anticorruption measure.
GAB | The Global Anticorruption Blog 
Great research efforts, l also request the researcher to conduct further study in regards to African politics or leadership before the current domcratic blowing all over. You will discover that in Africa then, leadership was never a private choice, but rather a collective decision by experience elders, for one to be appointed as a leader, and therefore less grant corruption, but the cultural corruption would continue to flourish 😊
Interesting analysis of this ‘can of worms’. I am not surprised the link is weak and for two additional reasons. First, democratic politics are competitive. Providing more public funding does not mean that parties will necessarily spend less money on campaigns, especially when there is vote buying. Second, parties also use war chests for spending between elections and maintaining coalitions. Public funding is only like to reduce corruption if accompanied by transparent reporting and sanctions for breaches, including vote-buying (more cans of worms).
Whenever public funding of political parties comes into my mind, it reminded me Mahatma Ghandi saying: “It is better to have a rupee from one thousand people than to have a thousand rupees from one person.”
Thanks for a thoughtful post. But don’t forger that state funding of political parties presents its own series of knotty questions. How viable should a political party be before it qualifies for funding. And who decides the threshold? The legislature peopled with members of parties threatened by subsidizing new parties? See the debate in Germany in the 1970s where the Constitutional Court finally stepped in as the established parties wanted a very high threshold. Or Canada where the rise of a green party was retarded for years by the established parties refusal to cut it on state funding.
Moreover, what if an extremist party of the left or right surges? Should the state fund it? Even if the party is committed to constitutional changes that would effectively end the democratic system? Again, who decides?
Every method I know of for funding parties and candidates stinks in one way or another. Anyone coming up with one that does not, please don’t keep it secret.
Very much true. State funding also makes political parties subservient to state control.
This post and the comment by Richard Messick seem to make a lot of sense. In a society where corruption is widespread, it doesn’t look unlikely that party elites will gladly use the funding from the state and still continue to indulge in corrupt practises. In that sense funding could easily end up subsidizing the same elites as they now wouldn’t have to pay out of pocket for their political campaigns.