First Inter-American Electoral Training SeminarFirst Inter-American Electoral Training Seminar Organisers: GS/OAS, Mexican Federal Electoral Organisers: GS/OAS, Mexican Federal Electoral

Institute (IFE), International Institute for Institute (IFE), International Institute for Democracy and Electoral Assistance Democracy and Electoral Assistance

(International IDEA), Latin American School of (International IDEA), Latin American School of Social Sciences (FLACSOSocial Sciences (FLACSO

Presented by:Presented by:Cynthia T. J. Barrow-GilesCynthia T. J. Barrow-GilesNovember 18, 2008November 18, 2008

Issues involvedIssues involved

•• quantityquantity

•• origin origin

•• the distribution – equity the distribution – equity

Political Corruption Association with Political MoneyPolitical Corruption Association with Political Money

the receipt of monies in violation of existing rulesthe receipt of monies in violation of existing rules

use of illicit money for political parties and election campaign purposesuse of illicit money for political parties and election campaign purposes

using money to engage in vote buyingusing money to engage in vote buying

participation in and facilitating illicit business dealingsparticipation in and facilitating illicit business dealings

use of public resources for political party purposes or proselytising, use of public resources for political party purposes or proselytising, BriberyBribery

acceptance of money from questionable sourcesacceptance of money from questionable sources

selling of influenceselling of influence

(Griner and Zovatto)(Griner and Zovatto)

Alternatives for the Regulation of Political Alternatives for the Regulation of Political Party and Electoral Campaign FinancingParty and Electoral Campaign Financing

Classification of Global Regulatory RegimesClassification of Global Regulatory Regimesfor Party Financingfor Party Financing

The Autonomy Option – Defined by minimum The Autonomy Option – Defined by minimum regulationregulation

The Transparency Option – Disclosure - Public The Transparency Option – Disclosure - Public access to information access to information

the Advocacy Option the Advocacy Option

The Diversified regulation Option – Mixed SystemThe Diversified regulation Option – Mixed System

Options Available Vis a Vis Political MoneyOptions Available Vis a Vis Political Money

Unchecked Unchecked

Regulated Regulated

Regime of Political Party Financing in Latin American:Regime of Political Party Financing in Latin American:Dominant TendenciesDominant Tendencies

A combined of public and private funds A combined of public and private funds

Three methods are used to allocate public financingThree methods are used to allocate public financing

In proportion to the votes cast (53%)In proportion to the votes cast (53%)

Equal distribution, proportionality (votes) Equal distribution, proportionality (votes)

proportion of votes cast and parliamentary representation proportion of votes cast and parliamentary representation

Legal barrier or standard for eligibility for public funding. Legal barrier or standard for eligibility for public funding. Percentage of votes castPercentage of votes cast

Regime of Political Party Financing in Latin American:Regime of Political Party Financing in Latin American:Dominant Tendencies Con’tDominant Tendencies Con’t

Disbursement Disbursement -- a combination of prior to the elections, and rest aftera combination of prior to the elections, and rest after- - funds following the elections, funds following the elections,

Maintenance of a system of sanctions usually monetary and Maintenance of a system of sanctions usually monetary and administrative but also criminal sanctions. administrative but also criminal sanctions.

Oversight agency. Oversight agency.

Free access to the State media, private media or both. Free access to the State media, private media or both.

Restrictions on the origin of private contributions.Restrictions on the origin of private contributions.

Public Financing: Benefits and DisadvantagesPublic Financing: Benefits and Disadvantages

BenefitsBenefits

Avoid, reduce or curtail the influence of private interest groups. Avoid, reduce or curtail the influence of private interest groups.

Offers more equitable conditions Offers more equitable conditions

Encourages a greater degree of transparency Encourages a greater degree of transparency

to maintain the viability of political partiesto maintain the viability of political parties

DisadvantagesDisadvantages

May encourage alienation of parties from membershipMay encourage alienation of parties from membership

Over reliance on the state especially of a financial nature which Over reliance on the state especially of a financial nature which can can lead to convergence lead to convergence

Reduction in density of political parties as parties lose incentive to Reduction in density of political parties as parties lose incentive to increase membershipincrease membership

Private Financing: Risks and BenefitsPrivate Financing: Risks and Benefits

BenefitsBenefits

promotes greater constituency focuspromotes greater constituency focus

a multiple social base of supporta multiple social base of support

encourages the creation of networks of supporters encourages the creation of networks of supporters

reduced the dependency on the Statereduced the dependency on the State

RisksRisks

penetration of the systempenetration of the system

disproportionate influencedisproportionate influence

Unknown intentions of donorsUnknown intentions of donors

Primary Dilemmas for the Regulation of Political Primary Dilemmas for the Regulation of Political Parties and Electoral Campaign FinanceParties and Electoral Campaign Finance

candidate centered politics versus political party politics.candidate centered politics versus political party politics.

Imposition of sanctions – candidates or political partiesImposition of sanctions – candidates or political parties

Enhance democratic selection. Enhance democratic selection.

Lack of culture of political accountability Lack of culture of political accountability

dependency on the state versus independencedependency on the state versus independence

private versus public financing.private versus public financing.

when to disburse fundswhen to disburse funds

full disclosure vs. right of privacyfull disclosure vs. right of privacy

Strengths and Weaknesses of Strengths and Weaknesses of Regulated Vs Unregulated SystemsRegulated Vs Unregulated Systems

Objectives of regulatory Reform: StrengthsObjectives of regulatory Reform: Strengths

ensures that parties have adequate funding ensures that parties have adequate funding

ensures fairer competition between partiesensures fairer competition between parties

protection of parties and the system from protection of parties and the system from

corruption and influence peddling corruption and influence peddling

affords greater transparencyaffords greater transparency

Guidelines for the Design, Review, or Implementation Guidelines for the Design, Review, or Implementation of Legal Regulations in the Fieldof Legal Regulations in the Field

Why an Effective Legal Framework Why an Effective Legal Framework

To avoid abuse and influence peddlingTo avoid abuse and influence peddling

creates a level playing field for inter party creates a level playing field for inter party competitioncompetition

empower voters through rules on disclosure empower voters through rules on disclosure

the strengthening of political parties the strengthening of political parties

to ensure a minimum of responsibilityto ensure a minimum of responsibilityGriner and ZovattoGriner and Zovatto

Priorities of Political Party Finance Priorities of Political Party Finance Regulatory RegimeRegulatory Regime

Regulatory Frameworks need to answer the following:Regulatory Frameworks need to answer the following:

How to maintain the autonomy of political parties, How to maintain the autonomy of political parties,

How to enforce relevant regulations – How to enforce relevant regulations –

transparency in the sourcing and use of parties’ transparency in the sourcing and use of parties’ financial resourcesfinancial resources

effective electoral competition and promote effective electoral competition and promote political equalitypolitical equality

limit the influence of money on electionslimit the influence of money on elections

Best Practice: Ensuring that Electoral contest are Fair Best Practice: Ensuring that Electoral contest are Fair and Promote Political Equityand Promote Political Equity

The constitutionalisation of political partiesThe constitutionalisation of political parties

Access to public financing, whether direct or indirect – adjustable Access to public financing, whether direct or indirect – adjustable depending on the state of the economydepending on the state of the economy

A mixed regime of public financeA mixed regime of public finance

Access to the mediaAccess to the media

Prohibitions and restrictions on private fundsProhibitions and restrictions on private funds

Accountability of political parties and candidates – reporting in a Accountability of political parties and candidates – reporting in a timely manner timely manner

Full disclosure Full disclosure

Sanctions against violationsSanctions against violations

Independent oversight agencyIndependent oversight agency

More Aspects More Aspects Best Practice: Political Equity and FairnessBest Practice: Political Equity and Fairness

Limits on private financingLimits on private financing

Adequate sources of finance and resources for regulatory Adequate sources of finance and resources for regulatory bodies.bodies.

attention to timing of disbursement to ensure equityattention to timing of disbursement to ensure equity

Provisions directly targeting access to the mediaProvisions directly targeting access to the media

Gender equity considerationsGender equity considerations

Thresholds established to receive government fundingThresholds established to receive government funding

Fluidity in public funding based on state of the economy Fluidity in public funding based on state of the economy

Avoid over regulationAvoid over regulation

Types and Methods for Public FinancingTypes and Methods for Public Financing (Types, amounts, Distribution Formulas) (Types, amounts, Distribution Formulas)

General Pillars of Public FinancingGeneral Pillars of Public Financing

direct subsidies for electoral direct subsidies for electoral expenditureexpenditure

subventions whether direct or subventions whether direct or indirectindirect

Types and Methods for Public FinancingTypes and Methods for Public Financing (Types, amounts, Distribution Formulas) (Types, amounts, Distribution Formulas)

Direct Funding: Direct SubsidiesDirect Funding: Direct Subsidies

MoneyMoney

bondsbonds

loansloans

Types and Methods for Public FinancingTypes and Methods for Public Financing (Types, amounts, Distribution Formulas) (Types, amounts, Distribution Formulas)

Con’tCon’t

ModalitiesModalities

funding exclusively for the day to day operations funding exclusively for the day to day operations of the political parties – noneof the political parties – none

funding for elections only – Bolivia, El Salvador, funding for elections only – Bolivia, El Salvador, Honduras, Nicaragua, UruguayHonduras, Nicaragua, Uruguay

a combination of the two – Argentina, Brazil, a combination of the two – Argentina, Brazil, Colombia, Costa Rica, Dominican Republic, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Mexico, Panama and Ecuador, Guatemala, Mexico, Panama and Paraguay.Paraguay.

Types and Methods for Public FinancingTypes and Methods for Public Financing (Types, amounts, Distribution Formulas) (Types, amounts, Distribution Formulas)

Con’tCon’t

Indirect Funding : Indirect subsidiesIndirect Funding : Indirect subsidies

infrastructure,infrastructure,

tax exemptionstax exemptions

access to the media especially televisionaccess to the media especially television

institutional support institutional support

assistance with transportationassistance with transportation

assistance to parliamentary groupsassistance to parliamentary groups

Types and Methods for Public FinancingTypes and Methods for Public Financing (Types, amounts, Distribution Formulas) (Types, amounts, Distribution Formulas)

Con’tCon’t

Distribution: Public MoniesDistribution: Public Monies

Four modalitiesFour modalities

Equal SharesEqual Shares

Proportional to the number of votes cast - Bolivia, Brazil, Proportional to the number of votes cast - Bolivia, Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, UruguayNicaragua, Uruguay

Proportional to the number of votes cast and parliamentary Proportional to the number of votes cast and parliamentary representation – Paraguayrepresentation – Paraguay

Proportional to the number of votes cast and equally - Proportional to the number of votes cast and equally - Argentina, Dominican Republic, Panama, Mexico, EcuadorArgentina, Dominican Republic, Panama, Mexico, Ecuador

Status in Selected CountriesStatus in Selected Countries

Country Legal Barrier

Argentina participation in preceding elections

Bolivia participation in preceding elections

Brazil participation in previous elections

Uruguay at least 500 votes, participation in internal and primary elections

Honduras None

Paraguay None

El Salvador None

Panama 5% of valid votes cast

Costa Rica 4% of votes cast or 1 parliamentary representative

Mexico 2% of votes cast

DisbursementsDisbursements

Three Time Lines for DisbursementsThree Time Lines for Disbursements

Full disbursement before the electionsFull disbursement before the elections

Disbursement after the electionsDisbursement after the elections

A mixed system embracing elements of A mixed system embracing elements of the two above systems – dominant the two above systems – dominant tendencytendency

Disbursement of FundsDisbursement of FundsSelected CountriesSelected Countries

Country Timing

Argentina Before Elections

Bolivia Before and After

Dominican Republic Ditto

El Salvador Ditto

Guatemala Ditto

Honduras Ditto

Brazil After

Nicaragua After

Regulatory Dilemmas for Private Financing: Regulatory Dilemmas for Private Financing: Restrictions on Sources and Spending LimitsRestrictions on Sources and Spending Limits

Prohibitions and RestrictionsProhibitions and Restrictions

Most countries provide for prohibitions on private contributionsMost countries provide for prohibitions on private contributionsfrom sources such as:from sources such as:

- foreign governments - Colombia and Nicaragua no such restriction- foreign governments - Colombia and Nicaragua no such restriction

- institutions or individuals- institutions or individuals

- Government contractors – all but Bolivia, Chile, Colombia, Costa Rica- Government contractors – all but Bolivia, Chile, Colombia, Costa Rica

- anonymous donations –all but Chile, Dominican Republic, Paraguay- anonymous donations –all but Chile, Dominican Republic, Paraguay

- social organisations such as trade unions, special interest groups, religious groups etc.- - social organisations such as trade unions, special interest groups, religious groups etc.-

only Argentina, Bolivia, Brazil, Paraguayonly Argentina, Bolivia, Brazil, Paraguay

limitations on individual contributions. Argentina, Brazil, Chile etc.limitations on individual contributions. Argentina, Brazil, Chile etc.

Modalities of Private FundingModalities of Private Funding

membership duesmembership dues

donations from special interests donations from special interests groupsgroups

individual donationsindividual donations

credit/loanscredit/loans

party fund-raising activities party fund-raising activities

DilemmasDilemmas

Establishing a realistic limitEstablishing a realistic limit

Numerous restrictions may Numerous restrictions may encourage ‘creative’ accountingencourage ‘creative’ accounting

Perspectives of and Particular Challenges for the Commonwealth Perspectives of and Particular Challenges for the Commonwealth Caribbean in Terms of Adopting a Regulatory FrameworkCaribbean in Terms of Adopting a Regulatory Framework

Aspects of the Regulatory Framework in the CaribbeanAspects of the Regulatory Framework in the Caribbean

Indirect SubsidiesIndirect Subsidies

access to the State run mediaaccess to the State run media

subsidies to parliamentarians, St. Lucia, subsidies to parliamentarians, St. Lucia, BarbadosBarbados

Direct public subsidy in Barbados only.Direct public subsidy in Barbados only.

Aspects of the Regulatory Framework in Aspects of the Regulatory Framework in Antigua and Barbuda Post 2001Antigua and Barbuda Post 2001

disclosure of contributions exceeding disclosure of contributions exceeding EC$25,000.00EC$25,000.00

prohibits anonymous contributions exceeding prohibits anonymous contributions exceeding EC$5,000.00EC$5,000.00

authorised audits by the ECauthorised audits by the EC

sanctions for non compliance includingsanctions for non compliance including-- Penalty of EC$2,000.00 a dayPenalty of EC$2,000.00 a day

Status of Regulatory Regime in the Commonwealth CaribbeanStatus of Regulatory Regime in the Commonwealth Caribbean Country Disclosure By Party By Candidate Contribution Limits Spending Limits

Antigua & Barbuda Yes No Yes No No

Bahamas No No No No No

Barbados Yes No Yes No Yes

Belize No No No No No

Dominica No No No No No

Grenada No No No No No

Guyana Yes No Yes Yes Yes

Jamaica Yes No Yes No Yes

St. Kitts/Nevis No No No No No

St. Lucia No No No No No

St. Vincent & The Grenadines

No No No No No

Trinidad & Tobago Yes No Yes No No

Total % 47.67/52.33 100.00 47.67/52.33 8.33/91.67 25.00/75.00

Anticipated Difficulties of Adopting an Effective Anticipated Difficulties of Adopting an Effective Regulatory FrameworkRegulatory Framework

Small population sizes, ranging from 2.5 million in Jamaica, to $50,000 in Small population sizes, ranging from 2.5 million in Jamaica, to $50,000 in St. Kitts-NevisSt. Kitts-Nevis

Reluctance on the part of donors to have their names published for fear of Reluctance on the part of donors to have their names published for fear of victimisationvictimisation

A political culture of clientelism and patronageA political culture of clientelism and patronage

Small size of party membershipSmall size of party membership

Small GDP’s, financial and economic Small GDP’s, financial and economic

difficulties make public funding difficultdifficulties make public funding difficult

Constitutional amendment is requiredConstitutional amendment is required

Lack of a critical massLack of a critical mass

Resistance by politiciansResistance by politicians

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