Nepal | July 06, 2020

Political corruption: State funding of parties needed

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In Nepal, debonair politician Dr. Prakash Chandra Lohani, then the finance Minister, had mooted party funding when he presented the annual budget in 2003. Unfortunately, his wise words fell on the deaf ears of MPs

It is heartening to know that Nepal has gone up by eleven places in the Global Corruption Index, according to a recent report published by Transparency International.

Nepal now enjoys 113th rank from the earlier 124th among 180 countries of the world. If New Zealand and Denmark proudly top the list, Somalia embarrassingly finds itself at the bottom.

Though 22 countries have exhibited ascent, for example, Ethiopia by 18 places, an equal number of countries – even the United States – have experienced a slide down in the list by one spot.

Altogether 137 countries, however, remained in their usual state. The corrupting role of special interest money in political party financing has been mainly held responsible for this worrying state of affairs in the report.

Corruption has been rife among countries since a long time. Panchari, that polymath of the first water in the fourth century BC, said that it is just as difficult to catch the corrupt officials red-handed as it is to find fishes drinking water or the bees eating honey. Prithvi Narayan Shah, who integrated several feuding states into what is Nepal today, said that both the taker and giver of bribes are equally responsible and liable even for a death sentence. It shows just how old the history of corruption is in the region and the country.

The corruption level in the political parties is shooting up instead due to their ever increasing expenditure. In a survey conducted by Transparency International in 2016, 90 per cent of the people surveyed said the political parties were the most corrupt in Nepal.

In India, the 2016 election cost a staggering $4 billion. It is said to be the second costliest election after the 2012 US Presidential election.

This colossal amount of money was raised mostly through corporate donation, which reached an astronomical figure of 89 per cent. It is also known as the infamous briefcase politics. In Nepal also, each winning as well as losing Member of Parliament is said to have spent $1 million on average. As a result, cronyism and its all-weather friend corruption raise an ugly head following an election in many countries.

The Westminster Scandal in Britain, the Watergate Scandal in the United States and the Lalita Niwas scandal back in Nepal are manifestations of this phenomenon.

How to cleanse politics of corruption has been one of the most intriguing problems the world over. The panacea has been found in the now widespread party funding. Interestingly, this campaign started from Latin America.

Urugyay may be known as the first country to win the Football World Cup in 1930, but it is also the first country to have introduced party funding ten years earlier in 1920. Germany followed suit in 1950 in Europe, which was followed by the United Kingdom and France.

The United States jumped into the fray in the year 1960 during the tenure of President Kennedy. As a result, 118 countries have adopted this system around the globe. In Nepal, debonair politician Prakash Chandra Lohani, then the finance Minister, had mooted this idea when he presented the annual budget in 2003. Unfortunately, his wise words fell on the deaf ears of the Parliamentarians.

Party funding seeks to create equal influence of all the people in national politics. Generally, the rich and wealthy exercise tremendous influence when compared to a modest voter. This school of thought was coined by political philosophers and democracy scholars like John Rawls, Robert Dahl and Ronald Dworkin.

According to them, democracy requires each of the citizens to not only have equal say in choosing the candidates but also equal opportunity to persuade others.

There can be several modi operandi of financing the political parties. Only national parties that have secured minimum votes in the last election can be given this opportunity as in Belgium or Greece.

Direct funding is provided to the party headquarters or regional offices, the latter being prevalent in the United States. Some countries pay the full amount after the party submits an audited report.

But there are some countries like Germany that provide a matching fund to the fund raised by the parties through small donations.

Indirect funding involves financing for access to public media, free or subsidised public transport for the candidates, free printing or distribution of banners and the like, and providing loans for campaigning. This is practised by almost 68 per cent of the party funding countries.

In India, Goswami, Gupta committees and the like have recommended partial funding only. One such committee recommended imposing a cess of 0.2 per cent of the income paid by individuals and corporate bodies for party funding.

Yet another committee advised allocating $700 million while the expenditure incurred in 2016 was said to be $4 billion. In France, 80 million euros are allocated for this purpose. Dr Lohani had set aside Rs 20 per vote in his budget speech of the year 2003.

Party funding is not without blemishes. It can also be a failure if the politicians do not perform responsibly as in South Africa.

But, it has been successful in several other countries. Nepal can also opt for this funding system to combat the ever rising political corruption in the country.

A version of this article appears in print on February 04, 2020 of The Himalayan Times.

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