I had the great privilege to participate in the launching of the Report on the Financing of Political Parties in El Salvador last December. The process of preparing my interventions and comments, allowed me to reflect on the progress and current challenges in the topic of transparency in politics and political parties. During 2018, seven (7) countries in Latin America will hold presidential, legislative, and municipal elections, and all will offer inputs to analyze party financing systems and their transparency and accountability. While political finance systems are an interesting object of analysis and debate, I believe they are just one component or sub-system of a larger and more complex political and governance eco-system. For this reason, the approach and analysis of the topic of transparency in politics must be multidimensional, and in addition to focus on the dynamics themselves, the analytical framework has to also focus on other related topics such as access to resources, the capturing of interests, and trust in democratic institutions. Ultimately, the political-party finance framework cannot be thought of as an end in itself, but rather as means to strengthen the democratic process and build confidence in democratic institutions.
According to the World Value Survey and other similar studies, around the world, with very few exceptions, trust in political parties is at a critical moment, since the trend in the last three decades is declining. According to the 2017 Latinobarometro Report, trust in political parties in Latin America is the lowest on the list of institutions of democracy in 2017. Only 15% of Latin Americans trust the political parties. The lowest ever reached, 11%, was in 2003, while the highest of 28% was registered in 1997. The country that in 2017 has the highest trust in political parties is Uruguay with 25%, and the least is Brazil with 7%. The low trust in political parties coincides with the atomization of the party systems, as well as with the crisis of representation and the disenchantment with politics.
Complementing the Latinobarometro Report, the LAPOP/Vanderbilt 2017 Report shows that trust in political parties in Latin America is 17.5%, ranging from 7.5% in Peru to 35% in Nicaragua. This level of trust is the lowest since 2004. Likewise, this report shows that since 2006, people who report being members of a political party in Latin America has dropped from 36% to 26% in 2017. If to the issue of distrust in political parties is added that persistent perception of corruption and the high inequality levels we are in front of a perfect vicious circle and its elements feed of each other, and generates a malaise towards politics, the political system, democracy, and its institutions. While it can still be argued that a majority of people in Latin America prefer democracy to other forms of government, the latest LAPOP data shows that the regional average support for democracy has declined in the last two years. This suggests, that people have become more cynical in their views of electoral democracy. A substantial proportion of people in Latin America is not particularly satisfied with how democratic governance is performing. This dissatisfaction has its roots in a number of factors, including lack of checks and balances, centralized decision-making process, general lack of transparency and accountability in the decision-making process, and the overall inability of the democratic governance system to deliver many of the society’s most basic needs in key areas such as education, citizen security and social welfare. And if to all of that is added a perception that the political parties are corrupt, that they do not represent collective interests in favor of public goods, and that in spite of that they receive large amounts of public and private money, all this generates a high level of illegitimacy in democratic processes.
In general, one hypothesis is that in Latin America citizens who perceive their national governments as delivering a strong economy and opportunities, curbing corruption, and providing security are most likely to support the democratic system and democratic politics, including its financing. The opposite is also another hypothesis. Thus more than trust, the central theme is legitimacy. Specific elements of legitimacy in Latin America, such as low trust in the judiciary system, high perceptions of corruption and impunity, high citizen insecurity, low inter-personal trust and high perceptions of economic injustices, opaque decision-making processes, are all spilling to cast a less than optimal support to the overall democratic governance system. This is illustrated in a synthetic way in Figure 1, which shows a correlation between the absence of corruption and levels of representation. That is, to less corruption more representation.
The Odebrecht case in Latin America illustrates one of the vicious circles. This case has uncovered a series of weaknesses not only in the party financing system, but also in the democratic system itself. The Brazilian construction company has recognized before the Brazilian justice system that it financed presidential electoral campaigns and candidates in Latin America. And that bribes were paid in amounts of at least 788 million dollars (680 million euros). The candidates favored by the contractor allegedly executed multimillionaire public works plan afterwards. The web that made these crimes possible is complex and it calls to analyze the resilience of the financing systems towards corruption risks and their effectiveness in making contributions transparent.
Political parties are the problem, but they are not the central one. They are reflecting a larger problem. The evolution of democratic governance systems implies representation on the one hand, and political parties on the other, and the implementation of electoral measures and institutions. In an ideal system, citizens give their voice to representatives so that they can advocate for their interests. In turn, representatives must have the capacity to aggregate demands from citizens and shape and move these demands in the political and/or public policy sphere. In other words, a virtuous circle.
The work of Hans Kelsen is still relevant. A century ago he observed how European societies surrendered before authoritarian and nationalist governments, and in defense of democracy he recognized that the ideal principle of democracy can be found in effect in the original direct democracy concept. However, to bring it to life and practice in the modern states, it was necessary to apply a representative system, elections and political parties. Kelsen said, “democracy can only exist if individuals regroup in accordance with their political affinities, with the aim of orienting the general will toward their political ends, in a way that between the individual and the State you have collective formations that, as political parties, assume the equal will of the individuals.”
Obviously between the ideal vision of Kelsen and the current reality of most of the political systems in the world, there is a gap. The growing nexus between the financing of political parties, political parties as organizations, the quality of representation, and a growing perception of exclusion, injustice and inequality, is fueling the growing distrust of citizens not only to the specific elements of the system (political parties, government actions), but also to a growing sense of illegitimacy of the entire system.
If corruption and weak party systems are allowed to continue the implications for democratic governance in the near future are ominous. Systemic corruption can delegitimize the entire political system rather than just one particular public official, party leader, policy or politician. Moreover, when citizens perceived that the primary motive for the pursuit of power by political parties is narrow self-interest, democratic processes are reduced to nothing more than a power struggle undermining policy development and resultant government programs and the electorate becomes apathetic and cynical.
Corruption and weak party systems also reduce accountability, especially when oversight and regulatory agencies fail to act because they have been captured by special interests. Perceptions of widespread corruption and impunity by political-party leaders and members also undermine economic development, and are often a major argument but forth by non-democratic forces to justify reverting to more autocratic governance systems.
In this context, it is important to emphasize that money is a necessary component of a democratic process, if it is open, transparent and governed by clear accountability frameworks. There is a very fine line between money and democracy, because both are complex and complicated processes and it is the goal of a democratic system to ensure that their relationship, interaction and articulation is transparent and effective. Money in politics or the financing of democracy is not the problem in itself, but the problems arise from how the other elements of the system work and articulate with each other; elements such as regulation or norms, the effectiveness of the control bodies to enforce the rules, the culture of accountability and transparency of political parties, and monitoring by citizens. In addition, other key elements to consider are: a capable and accountable executive branch, an independent judiciary, a strong and independent legislature, and an electoral system that allows for free and fair elections.
That is, the links between money and politics affect the very quality of democratic governance, representation as a principle of political organization, and the impartiality and competitiveness of electoral processes. Knowing who is behind the candidates makes it possible to assess the coherence of the discourse and the behavior of politicians and facilitates the discovery of ties, links and commitments whose knowledge is useful at the time of valuing the management of government.
This is why political party finance systems need continuous reform. While efforts to reform and improve democratic systems are expected to come from the government (the executive branch, legislators, the justice sector), this does not necessarily happen unless the rulers feel pressured by the citizenry. This is the main reason why the work of civil society organizations in political parties’ financing is crucial. When in 2010 in the United States the Supreme Court of Justice ruled against the Federal Electoral Commission (FEC) in the case of “Citizens United,” and categorized political donations as a way of freedom of expression, it protected the efforts of corporations, unions and individuals to privately finance political parties. Immediately after the verdict, civil society organizations like the Center for Public Integrity, Open Secrets, the International Consortium of Investigative Journalists (ICIJ), and Global Integrity, among various, became key actors to monitor political financing in the United States and outside as well.
In Latin America it is worth highlighting efforts such as journalists in Mexico, Chile Transparente in Chile, Poder Ciudadano in Argentina, and Accion Ciudadana in El Salvador, among several. Latin America offers a true laboratory of financing systems for politics. It is intimately related to the electoral system, the form of government and the way of doing politics in each country. The work of civil society is important to draw attention not only to the weaknesses of the current systems and the negative effects on the credibility of political parties, but also on what is working and can continue to be improved. Civil society can play a constructive role in monitoring the application of laws and regulations, in checking whether political parties are releasing appropriate and correct information and in systematically monitoring spending trends, revenue and private donations. They also have an educating role towards citizens, on issues of transparency, accountability, democratic values and the financing system.
Unfortunately, today civil society is functioning in less than ideal environments. In many countries, they are being curtailed and/or coopted by more authoritarian governments. Also, we live in a world where the media, mainly journalistic television, and with more intensity social media, are increasingly a main and alternative source of information and debate, as well as a means to shape perceptions and opinions on governance. At the same time, the written media and investigative journalism are being co-opted or they no longer have the same influence audience. While television and social media could be important elements of the democratic system, in recent years they have had a pernicious effect on politics and, in particular, on democratic politics and collective action. On the one hand, journalistic television has become a kind of entertainment show with individual personalities that move opinion, with groups of individuals that monopolize opinion, or with great ideological and / or polarizing content. On the other hand, social media has become a means to promote individual opinion, anonymity, trolls, bullying or harassment, and limits complex ideological debates to 280 characters. Reality is more complex, grayer than just black or white, and full of nuances, while journalistic television and social media simplify and minimize it.
At the same time, in most democratic governments, citizens find themselves increasingly divided and skeptical of the possibilities of collective action under democratic governance. Not only does it seem that they feel less connected to each other, but also that they feel less connected to their governments. As equality and social safety nets seem more vulnerable and trust in government dwindles, there is also a lack of confidence in the collective capacity to influence policy and political reality. The result is more polarized and heterogeneous citizens, more atomized, and more reactive than proactive. These distort the democratic political process, modifying its true meaning. And a poorly understood democracy further reduces its legitimacy, and complex issues such as political party financing are approached from a simplistic and highly ideological perspective, and lack real accountability force.
In an issue as crucial to democracy as transparency in politics, the right debate is not taking place. We are in the midst of discordant tendencies; on the one hand, the ideal of democratic politics that seeks to build bridges between political and social forces and add voices, versus the current reality that is closed and marked by individual opinion and polarization.
While there is no perfect political-party finance system, experience suggests that some approaches can be more effective than others in promoting transparency and accountability. The temptation always exists for candidates and parties to seek and use loopholes to circumvent control frameworks. The challenge is to design and enforce a framework that closes major loopholes and addresses irregularities, while not being so cumbersome as to undermine the competition that the system is designed to advance.
This reflection has reconfirmed that addressing the issue of transparency in politics should be a broad exercise that allows analysis not of individual parts of a system, but the system with all its parts. It is true, political party systems around the world today are weakened, due to various ills that afflict them, such as the quality of their political and management leadership, and the non-transparent management of the parties. The corruption scandals that have affected the parties, the low levels of credibility and the lack of information about the work they do have further diminished the trust of these institutions. But a more panoramic analysis can also show other systemic challenges. For example, the effect of broader transparency and accountability efforts carried out within the public institutions themselves, and how these create (or not) a culture of integrity among government officials, representatives, political parties, and social organizations.
Can all this be rebuilt and a more viable system reconstituted? The short and simple answer is yes. If the focus is on the political party finance systems, we can work on issues such as limits, both for private donations and for public financing; coordination and articulation between control entities, such as electoral courts, comptroller general offices, courts of account, superintendencies of banks or their equivalent, and tax offices; more financial transparency with rules/norms that make it obligatory for political parties, candidates and other political actors to disclose the sources and / or the use of their economic resources; enhance and promote regulations that aim to level the playing field for women and young candidates; and enforcing sanctions. Over the past decade there has been significant progress not only in strengthening finance systems, but also in terms of knowledge and evidence through analyzing, systematizing, and comparing political party finance systems in Latin America, as well as tools and recommendations, and analysis with a gender approach. It is a good platform to continue building and erecting the next platform.
The issue of transparency and accountability not only has to do with the political and legal dimensions, but also with the civil and civic sphere. Sometimes the citizens’ factor of transparency is neglected, as if citizens were passive actors of these processes. Without citizens’ active participation, transparency and accountability is incomplete. It is not only about the isolated citizenry that votes, is critical, complains and demands, but also the citizenry that is integrated, organized, participates informed, monitors and does oversight, and is constructive. And the scenario of action is not only the national one or where the epicenter of political power is, or where voices and interests are added. Nowadays, due to the complexities of societies, the space of action needs to be smaller, closer to the people and their needs. Then, rethinking political models, and ways of making politics more transparent, and improving the transparency and accountability of political parties, also implies thinking about a reform agenda that is systemic with comprehensive actions, but also one that is realistic and with priorities. If dysfunctional systems are given incompatible means and tools, the vicious circles will simply sustain themselves.
So, the lack of transparency in politics and political parties is a symptom of a more serious illness. Hence, the reform agenda has to be broader, systemic and innovative. We must analyze how to unblock ineffective multiparty presidentialisms; how to decentralize political and fiscal power to strengthen local governance; how to create institutional checks and balances in such a way that the Executive is not the only one that can decide; how to re-insert ethical and democratic values into everyday language; how to articulate public policies in a way that responds to real needs; how to ensure that more women and youth have access to elected power; and how to distribute political risks, in such a way that a crisis does not put the entire system at risk.
As key expert Delia Ferreira mentions, it is not only about implementing all reforms at once, and/or immediately. Minimally, a sequential reform agenda has to be produced, and tailored-made to fit each contextual reality. The reform agenda needs to be deliberated and consensus must be achieved among all relevant actors not only to delineate a path for moving forwards, but also to understand why reforms are being proposed. Otherwise, any reform attempt to improve transparency in politics and in political parties, however constructive they might be, will not be enough to break the vicious circle or cure the disease. That is, it is not only time to think and promote more systemic and audacious solutions, and implement them. But also we need to continue to improve the elements of the system that are working and fix those that are not working. Surely after the seven (7) elections that are scheduled for 2018 in Latin America, we will have other inputs to continue this conversation.