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International Forum >> The Democracy Forum for East Asia>> "Political Finance and Democracy in East Asia: The Use and Abuse of Money in Campaigns and Elections"
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Introduction
Session I: Political Finance in a Comparative Context Session II: Political Finance in the Philippines, Thailand, Indonesia, and India Session III: Political Finance in Korea, Japan, and Taiwan Session IV: Regulating Campaign Contributions and Expenditures Session V: Disclosure, Transparency, and Institutional Enforcement Session VI: Making Political Finance More Democratic: Developing an Agenda for Reform Agenda Participants |
Session IV: Regulating Campaign Contributions and Expenditures Moderator: Marc Plattner This session focused on the variety and effectiveness of prohibitions and limits on campaign contributions and expenditures in Asian countries. In many countries, contributions from business firms are the major source of political party income but, as numerous participants noted, corporate contributions often create problems for democracy. Pokkrong Soontharasudth, a member of the Election Commission of Thailand, noted that when businessmen invest in politics, they want to control their investment and to get their expected reward, which Mr. Pokkrong termed the patron-client system. He also cited the phenomenon of fraudulent companies that do not engage in business but do make political contributions. Despite the country's huge electorate and huge campaign expenses, political parties in India do not receive direct state subsidies, according to S.K. Mendiratta, a long-time official of the Election Commission of India. They do receive some subsidized television time and other indirect benefits, such as office space in the capital, but Indian parties raise most of their funds from corporate contributions. Political parties may not accept contributions from foreign sources and they must disclose contributions above a certain limit. Nonetheless, India has been plagued in recent years by a number of major financial scandals, some of which have led to the resignations of senior party leaders and government ministers. The Korean political finance system includes both state subsidies for parties and a system of indirect corporate contributions through so-called support groups. Soon-Doo Hong, an official of Korea's National Election Commission, criticized the support group system, arguing that "We need to cut ties between business and politics." Hak Won Kim, a parliamentary deputy representing the United Liberal Democrats, agreed that the system of channeling business contributions through support groups should be abolished and suggested that businesses be required to contribute to political parties through a 1 percent levy on corporate profits. Several participants debated the merits and faults of Korea's system of state subsidies for political parties. Soon-Doo Hong said that large subsidies reduce the independence of parties, adding that both the ruling and opposition parties had nonetheless agreed to raise their allocations. Some Korean participants argued that apportioning state subsidies based on a party's vote share in previous elections was unfair and that overly generous subsidies were harmful to parties. Hyung-Man Lee, vice president of the Center for Free Enterprise, suggested apportioning state subsidies primarily based on a party's level of democratization, thereby giving parties an incentive to democratize their organization and operations. But Japanese scholar Masaru Kohno also noted that any type of subsidy system will have some bias. Participants then discussed the merits of spending limits on election campaigns. India does not limit campaign spending by political parties, according to S.K. Mendiratta, and while there are limits on candidate expenditures, these are often violated. Japan also has spending limits for candidates based on the size of a parliamentary constituency, and these too are often violated. Soon-Doo Hong advocated stricter control over expenditures "so that rich and poor will have a fair chance" and promised more vigorous enforcement from the election commission. "Some say these controls are excessive," Mr. Hong said, but "I say we need to have transparent elections." But Jong Wan Kim called the current spending limits "absurdly low," adding that under current regulations, "a prospective lawmaker has to break the law to become an actual lawmaker." Several participants argued for greater disclosure of campaign contributions and expenditures. But Wichit Srisa-an from Thailand, newly elected to that country's parliament, said that disclosure would reveal the donor's partisan affiliation, which would conflict with the principle in Thai culture of not appearing to take sides. And Chito Gascon from the Philippines cited a World Bank study that concluded that some regulatory regimes had simply forced political finance outside the law. "We have a weak party system, so the contributions go directly to candidates in cash," Mr. Gascon said. "We need a system of state funding to level the playing field." Taking note of arguments on both sides, Michael Pinto-Duschinsky presented a chart illustrating the different approaches to contribution and expenditure limits adopted by the Asian countries. "Do limits work?" Mr. Pinto-Duschinsky asked. "Probably not," he answered, since there are many ways around limits, such as contributions disguised as loans, in-kind services, or even business transactions. Likewise, candidates can evade expenditure limits by spending outside the campaign dates or diverting spending through nonparty groups that perform campaign services. "The only way to make a limit effective is by restricting such a wide range of activities that you end up restricting free speech," Mr. Pinto-Duschinsky warned. |
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