The Cash Nexus: Money and Politics in Modern History, 1700-2000 by Ferguson Niall

Author:Ferguson, Niall [Ferguson, Niall]
Language: eng
Format: mobi, epub
Tags: Economics, 20th Century, Modern, General, Renaissance, World, Business & Economics, History
ISBN: 9780141976419
Publisher: Penguin UK
Published: 2013-03-07T05:00:00+00:00

FROM PRIVATE TO PUBLIC CORRUPTION

Politicians have an interest in trying to limit the costs of electioneering. The public has an interest in limiting the influence of rich donors over policy.60 These may seem straightforward rationales for regulating political finance. But both statements need qualification. For politicians, the costs of election campaigns pose a classic game-theoretical problem akin to the famous prisoners’ dilemma. If two rival parties co-operate to limit campaign expenditure, the total cost of an election is held down to the benefit of both winner and loser. But the temptation not to co-operate is very great, since the benefit of winning – power – exceeds the cost of even an expensive election. Whatever the rules say, both ‘prisoners’ are likely to renege on any deal in the belief that doing so may secure victory. At the same time, the public has an interest in leaving the cost of running political parties to someone else. The reluctance of individuals to join political parties suggests a fundamental lack of interest in this form of representation. If rich individuals and corporations are willing to pick up the bill for election campaigns, the majority of voters may not object, even if the result is that elected representatives are ‘in hock’ to investor-donors. It is these dilemmas that make the regulation of political finance so difficult.

A clear majority of democracies now have some kind of statutory control of campaign finances: only the Netherlands, Sweden and Thailand do not. Most democracies have sought to regulate party finance in three ways: by trying to cap political expenditures; by trying to cap private donations; and by offering public funding to political parties as an alternative to private money. In Britain limits on local expenditures date back to the Corrupt Practices Act of 1882, which imposed a ceiling on candidates’ individual election expenses (excluding Returning Officers’ charges) according to the number of electors in a constituency. This had the effect of halving the average amounts spent by those contesting seats. The expenditure limit in the late 1980s, following successive revaluations in every general election since the 1960s, was £3,240, with an additional 3.7p for each voter in the counties and 2.8p in the boroughs.61 Certain types of expenditure by candidates have also been outlawed, such as radio transmissions, posters, transport to and from the poll, and bribery in cash or kind.62 Only recently has the idea of a cap on central spending been raised. In October 1998 the Committee on Standards in Public Life chaired by Lord Neill recommended that national general election spending be limited to £20 million per party; and that campaigns by pressure groups on behalf of parties should not exceed £1 million in cost. To adopt this would be to follow the example of Canada, where the Election Expenses Act of 1974 placed strict limits on party spending both at the centre and in the constituencies.63 The Canadian experience, however, shows that spending caps do not necessarily narrow gaps between different parties’ financial strength.

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