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You need money to participate in elections and run political campaigns. While money may not guarantee electoral success, it is increasingly rare for those with limited funds to win. As politics has become more competitive through multi-party democracy, the cost of politics has grown - and so has the cost of being in office once elected. This, in turn, poses risks to effective democratic systems.
First, the financial demands on MPs during the electoral cycle create perverse incentives for them to focus on individual interests over public ones. It makes them susceptible to influence from those who can afford to pay – putting money and fundraising at the centre of political life. This can involve moves to ensure that their pay and allowances are as generous – and as opaque – as possible. In an environment where money and politics are so intrinsically linked, corruption increasingly becomes part and parcel of government function.
When the selection of candidates becomes more about their ability to pay than their competence to serve (...), citizens may see politics less as a choice between competing visions for the future of the country, and more as an auction of votes to the highest bidder.
The high cost of politics also contributes to the exclusion of aspirants that lack the resources to sustain political support throughout the election cycle. This particularly affects young people and women. The cost of politics is not being deliberately manipulated to exclude young people, but as it rises, the drop-off in youth participation is a clear by-product. Women too are marginalised. Female candidates often have less access to financial and political capital than male competitors. They therefore find themselves at a disadvantage when money is a deciding factor; often choosing to opt-out of politics because of the barriers they face in seeking to enter politics (with cost being just one consideration). Excluding certain segments of society does not make for a diverse legislature that is representative of a cross-section of the population. In turn, this leads to the alienation of groups in society who are not adequately represented.
Also on the Forum Network: Global Public Opinion on Democracy: While most still embrace democratic ideals, there’s discontent with how political systems are functioning by Richard Wike, Director, Global Attitudes Research, Pew Research Center
The health of democracy has declined substantially in nations around the world in recent years, with substantial support for non-democratic approaches to governing and even military rule. But research indicates that instead of turning away from it, many want more democracy and a stronger voice in political life.
The increasing concentration of political power in the hands of an elite – particularly when citizens perceive it to be wealthy, self-selecting, and self-interested – will likely struggle to maintain its legitimacy and credibility. When the selection of candidates becomes more about their ability to pay than their competence to serve, it is likely those candidates will not be up to scratch. Citizens may see politics less as a choice between competing visions for the future of the country, and more as an auction of votes to the highest bidder. This not only heightens cynicism, but also undermines the belief that political processes can deliver positive change.
How money is raised and spent within electoral cycles, as well as who receives it and how, are important but under-researched questions. Westminster Foundation for Democracy’s (WFD) cost of politics approach focuses on the spending of individuals contesting for political office rather than those of political parties. It is broad in its scope, aiming to cover expenditure incurred across several year election cycles following the money spent from the candidate’s decision to stand for political office at the party primary phase to the end of an individual’s elected tenure.
This approach helps us better understand what factors drive individual choices when it comes to spending on politics. It can help explain why there is a divergence between stated rules and regulations and their implementation by providing a clearer indication of the obstacles to regulating, curbing, or monitoring spending on political campaigns. It helps us understand the demands placed on prospective and existing MPs, as well as their internal calculations and the accountability pressures they face. These demands and pressures can be influenced by both formal institutions and regulations as well as informal institutions, cultures, and norms.
Five core recommendations emerge from the 15-plus studies undertaken by WFD and our partners on the costs of politics. Not all these recommendations apply in every case – country- specific nuances are captured in individual reports – but we believe that several issues transcend geographical boundaries and are critical areas for engagement:
- Campaign finance laws and regulations that include caps on campaign expenditure by individuals and parties should be developed, applied, and effectively and consistently enforced by an independent monitoring body. Those proven to be in breach should be sanctioned by a robust legal framework.
- Regular audits of campaign and individual expenditure that encompass party primary or selection processes as well as the campaign period should be undertaken and made public. A particular focus of these audits should be on donations made to campaigns by businesses.
- State funding for political parties should be introduced or adapted to ensure that thresholds include minority and not just dominant parties. Effective state funding of political parties can increase the competitiveness of smaller political parties, reduce the reliance on wealthy candidates for financing campaigns and encourage parties to prioritise locally popular candidates. An additional component could be to extend additional financial support to parties with established and adhered to quotas for the inclusion of youth and women candidates at the selection process.
- Any process of legal and institutional transformation must be accompanied by in-depth civic education work with citizens on the roles and responsibilities of elected officials. Led by independent media, civil society groups, trade unions and other influential social structures this improved understanding can support a move away from transactional politics. As long as gifts and favours continue to dominate voting and in-office expectations, clientelism will continue to influence political processes.
- Wider initiatives aimed at tackling corruption and improving transparency in governance should be supported as this can contribute to reducing the incentives for some wealthy political aspirants to spend such large sums to get elected to office in the first place.
Recent OECD work highlights that public trust leads to greater compliance with a wide range of public policies, nurtures political participation, strengthens social cohesion, and builds institutional legitimacy. It also emphasises that, in the longer term, trust is needed to help governments tackle long-term societal challenges, and that OECD governments will therefore need to invest in improving the mechanisms through which they give all people a voice.
A holistic approach to the question of how rising costs shape political and democratic processes should be critical to this endeavour. Indeed, the soaring cost of politics in many countries ultimately impacts not only the pockets of politicians; it risks decimating trust in democracy itself.
To learn more, check out also the OECD's report Building Trust and Reinforcing Democracy: Preparing the Ground for Government Action
Democracies are at a critical juncture, under growing internal and external pressures. This publication sheds light on the important public governance challenges countries face today in preserving and strengthening their democracies, including fighting mis- and disinformation; improving government openness, citizen participation and inclusiveness; and embracing global responsibilities and building resilience to foreign influence.
And find our more about the OECD's work on Anti-corruption and integrity