As the debate about state funding of political parties develops, it is tempting to look for a model from elsewhere which could be implemented here in full. The truth is that there is no single system of state funding in existence that would be ideal for the UK. The International Institute for Democracy and Electoral Assistance estimates that 59 percent of democratic countries have some kind of public funding. However, the type of regulation and funding of political parties is usually unique to each individual country as a result of specific historical and political concerns.
Germany
Strengths:
• Large membership for parties. Some state funding is linked to the amount that the party can raise. For example, the SPD has about 700,000 members paying about €100 each.
• Reliant on small donations. They account for the majority of parties’ income. Donations over DM6,000 account for less than 10 percent of the total income of all German parties.
Weaknesses:
• No caps on spending or income. Parties can still raise large amounts of money in order to compete at election times. Chancellor Helmut Kohl was brought down by a scandal in 1999 when it was revealed that he hid large corporate donations.
• Ineffective enforcement where four different groups are responsible. Different rules apply to parties, candidates, parliamentary groups and the research institutes, which create loopholes and bureaucracy.
Lesson: The German system has been very effective at promoting mass membership parties.
Canada
Strengths:
• Reducing influence of money. No individual can contribute more than $3,000 at national level or $1,000 at municipal level.
• Tight restrictions on party spending. Election spending is restricted to $0.3 per elector in all the constituencies where the party is standing a candidate and roughly $1 per elector for each candidate, decreasing proportionately for larger constituencies. In the 1997 general election, a party standing in all 301 constituencies was allowed to spend $11m.
Weaknesses:
• Election spending reimbursement. Candidates and parties are reimbursed a proportion of their election expenses in retrospect, depending on the amount of votes they get.
• Heavy regulation. All donations over $200 have to be declared but the requirements mean that there could be up to 18 months before the source of a donation is public knowledge.
Lesson: Canada has successfully reduced the influence of money and there are few examples of abuse.
United States
Strengths:
• Powers of the Federal Election Commission. The FEC has powers of audit and quasi-judicial powers which enable them to act both as enforcers and advisors to parties and candidates.
• State-based reforms. A number of states have introduced reforms by which candidates are eligible for matching funding if they accept caps on donations and spending.
Weaknesses:
• Tax check-off scheme. State financing for general elections is through an optional tick box on the tax return that all US citizens have to complete. It doesn’t cost them any more tax if they choose to donate it. However, so few citizens choose to tick the box that the fund is on the verge of bankruptcy.
• Voluntary spending limits. State funding is linked to spending limits rather than donation limits. A candidate can turn down state funding and massively outspend their rival. The cost of elections has been spiralling since the discovery in the 1980s of (unregulated) ‘soft money’.
Lesson: Tax tick-box schemes are unlikely to provide parties with a sustainable base of state funding.