Financing Democracy Conference: Presentation by Elizabeth Spehar

Presentation by Elizabeth Spehar
Executive Coordinator OAS Unit for the Promotion of Democracy

Financing Democracy in the Americas:
Strengthening Political Parties

Thank you very much, and my thanks in particular to The Carter Center for giving us this opportunity to collaborate with them on this important event.

The Organization of American States has come to focus specifically on the issue of political parties a relatively short time ago. This has come about, in large part, because of the growing recognition among OAS member states that, to consolidate and improve our democratic systems, it is imperative to look at the role of political parties. This concern for the role of parties in a democracy was clearly expressed by OAS states at the last Summit of the Americas held in Quebec City and was reiterated in the Inter-American Charter, the new OAS guiding instrument on democracy which was approved in September of 2001.

In part, this concern or focus on political parties, which is not exactly newin terms of social science analyses of the components for democratic governance, is nonetheless significant inasmuch as there appears to be a renewed focus on parties in an operational sense--that is, looking more closely and intensely at what we do about increasing the relevance and positive impact of a well-functioning party system on a democracy.

There also appears to be new interest in the subject on the part of various multilateral institutions, most of whom for decades found the issue too sensitiveto delve into in any meaningful way. With respect to the multilateral banks in particular, this interest is part of a broader awakening. The banks now have clearly accepted and endorsed the concept that "politics matters" when looking at economic and social development and that political institutional reform cannot be seriously conducted without taking into account the role of political parties.

Much has been said and written about the crisis of political parties in the Americas and elsewhere in the world. Opinion polls and surveys appear to uphold the notion that citizens in the region are increasingly alienated from organized political life; with the exception of a few countries, figures are low for membership in political organizations. Many parties reflect very poorly the social and ethnic pluralism of their societies, particularly when it comes to leadership positions, and women still have an uphill battle when it comes to reaching a party structure's upper ranks.

Perhaps that is why the perception is prevalent in many of our countries that parties are out of touch with much of the citizenry and their real needs. They and their leaders also are frequently perceived as not offering concrete or convincing solutions for many of the serious social, economic, and political challenges facing numerous countries.

The often-cited "LATINOBAROMETRO" public opinion poll is a blunt reflection of this questioning of the political party role in societies of the region and their loss of legitimacy in the eyes of many. According to the latest poll, confidence in parties in Latin America has hit a low of 19 percent, 53 points behind the Church, which enjoys the highest level of public confidence, and a full 30 points behind television, which holds second place.

Yet, equally clear, is the absolute necessity of preserving and, indeed, strengthening the role of parties in democracy, as the principal vehicle for aggregating interests and seeking and holding power in a democracy. This strengthening must include issues such as parties' own internal democratization, their transparency, effectiveness in articulating and carrying out a political platform, their effectiveness in government or in opposition, their relationship with the public, and in particular, their inclusiveness in terms of bringing in as participants and leaders those voices and sectors in society that have traditionally been excluded from political power.

That being said, it is worth repeating that strengthening the role of parties is not a "zero sum game" when it comes to the role of an increasingly active sector in public life, the so-called "organizations of civil society." Rather than enter into a debate on whether entities, such as neighbourhood associations, NGOs, labour groups, and others, are a vital complement to political parties or whether parties are just another manifestation of "organized civil society," along with these other groups, suffice it to say that all have their proper place in a modern, well-functioning democracy.

It has been shown how citizens organized under various banners other than parties have made critical contributions towards greater government transparency, more participatory public policymaking, and much greater and more systematic oversight of government actions than ever before. At the same time, when such organizations have appeared to dispute political power with political parties, the effects have been controversial and generally not constructive.

The issue of financing of political parties and campaigns, which is the central issue of this event, is also at the heart of what appears to concern citizens most with respect to the functioning of political parties and politicians in their countries: concerns about corruption and the influence of money in politics.

For this reason, and based on specific mandates from the Quebec Summit and the Democratic Charter, the OAS Secretariat, through the Unit for the Promotion of Democracy, has put specific emphasis in its party-related work on the issue of political party financing. In addition to our collaboration in this event with The Carter Center, the Unit, in the framework of the Inter-American Forum on Political Parties, has partnered with the organization International IDEA to conduct a comprehensive study on political party and campaign financing.

The first of its kind in the Americas, this study will include all 34 countries of North, South, and Central America, and the Caribbean. It is a study that seeks not only to collect and categorize existing legislation on financing parties, but it seeks to take things one step further. What is happening in reality? What were the motives of implementing the existing legislation? Who, if anyone, enforces it? What have been the consequences, both intended and unintended of this legislation? We hope that this study will serve those very political party leaders who seek to reform their party financing regimes to provide continuous, transparent, and just financing for political parties.

In its development, we are approaching this comparative analysis from two very basic, but important, premises. First, as I have already mentioned, that political parties have a legitimate, indeed, vital role to play in the democracies of the region. Secondly, the premise that political parties need money and reasonable amounts of it. It is paradoxical that, on the one hand, many cry out for fundamental changes for political parties: that they choose their leaders democratically; that they formulate thoughtful national plans to address complex economic and social problems; that they reach out in a meaningful way to minorities, women and youth. Yet few admit that much of this will necessarily require money. Institutionalized, democratized, and transparent political parties do not come for free.

Which brings us to the study. After two very fruitful workshops in Latin America and the Caribbean and through conducting and participating in other consultations and meetings such as this one, we have begun to gather information about four important aspects of political party funding: 1) disclosure, 2) enforcement, 3) public and private financing regimes, and 4) access to the media; indeed, the same themes that will be addressed in the breakout sessions during this conference. Not surprisingly, the problems faced in political party finance in all the regions of the hemisphere can be traced to these issues, be it Argentina, or Antigua and Barbuda, the United States, or Uruguay.

An often overlooked, but extremely important, region of our hemisphere is the Caribbean. Some 11 of the 14 CARICOM countries have embarked on or are considering constitutional reform. The issues being addressed are wide-ranging, including the reform of the Westminster System of Government, but there is precious little mention of political parties. Political parties in most Caribbean countries were not contemplated in their constitutions or even in existing legislation.

With regards to disclosure, the United States Agency for International Development is in the process of publishing a handbook on this issue detailing existing legislation in 118 different countries. The OAS has already tapped into this resource, both through the handbook and through its principal editor, Gene Ward, who will be giving a presentation tomorrow on this subject. The handbook will be translated into Spanish by the OAS, and we hope to work with USAID to distribute it in our member states.

As Gene will attest, there remains much to be done in this area. Of the countries surveyed, 85 percent have some type of disclosure on the books, but only 15 percent have full disclosure. In those countries where disclosure exists, enforcement is weak or nonexistent.

Noncompliance of existing legislation does not happen because of loopholes in the law--although that certainly happens--it is from a lack of enforcement. States either lack the resources or the political will--or both--to ensure that parties comply with disclosure laws. Yet there must be some sort of enforcement agency, such as the electoral authorities, for example, which can investigate and impose sanctions in a timely manner. Sanctions, as they exist now in the countries which have them, are minimal and imposed well after Election Day, if at all.

Who is going to respect the laws if the benefits of breaking them outweigh the costs of obeying them?

The third theme in the OAS/IDEA study is that of public financing. Public financing for political parties is not an easy sell. The global economic climate is tough and budgets are tight. The argument against public financing is often presented simplistically as "welfare for politicians." The arguments for public financing cannot be easily placed on a bumper sticker, and not everyone is convinced of its effectiveness.

Nevertheless, it merits further study. Public funding can help provide equal opportunity for political parties. Mexico is a case in point and is detailed in the briefing materials provided for this conference. In 1996, Mexico implemented far-reaching financing reform that mandated a full 90 percent of public funding. The competition among the three principal parties in that country has increased as a result, evidenced by the congressional elections of 1997 and, of course, the presidential elections of 2000. No one is advocating one particular model, but models such as that of Mexico deserve a second look.

Of course, public financing will not reduce the costs of campaigns if it is not accompanied by campaign limits. Without them, public financing could become nothing more than frosting on the cake, a supplementary form of funding to be added to that of other sources.

Which brings us to the final theme of the conference: access to the media. In presidential and other national elections, the cost of the media is rising tremendously, both in the north and the south.

One of our experts has referred to media costs and the pressures on parties to raise ever more funds for media communications as a "never-ending rat race." Most believe that campaign spending limits and some sort of equitable and affordable access to the media is needed for elected leaders to concentrate more on governing and less on raising money.

It is my personal opinion that the growing cost of politics and the increasing pressure to raise more and more funds has shut the door for women politicians in particular. One study estimated that womens' membership in political parties in Latin America is around 40 percent, but their presence in the upper echelons of leadership progressively diminishes the further up the organizational chart you climb. In Latin America, women constitute approximately 14 percent of parliament membership, just above the world average, but far short of their corresponding membership in political parties. The talent pool in this part of the world is broad, and political leaders should be tapped from all sources. Money should help, not hinder that search.

Before I close, I would like to emphasize that political party reform and development is an immense task in any part of the world and will require the concerted effort of many sectors of society. It is for this reason that the OAS, through the Unit for the Promotion of Democracy, created the Inter-American Forum on Political Parties, as a multisectoral effort to establish, promote, and bring into effect an interamerican agenda for the reform and modernization of political parties and party systems in the hemisphere.

Initiated in December 2001 in Miami, the Forum, first and foremost, is an initiative about political parties but not a space exclusively for parties, in terms of participation. While certainly parties are our prime participants, and hopefully, beneficiaries--indeed they comprise a full 50 percent of the audience at our annual meetings--we believe that what ails political parties and systems in this region and the impact which this has on our democratic systems requires discussion and deliberation among all those concerned about such matters.

As a result, the Forum convenes and works with a variety of social and political actors, including political parties and party foundations and internationals, as well as organized civil society groups, media representatives, academia, electoral authorities, and international organizations, to name just a few.

In keeping with the declared goal of the heads of state and government of this hemisphere, it is our objective at the OAS Secretariat to work together with all interested sectors to ensure that there remains a firm commitment on the part of governments to address issues of political party system reform and modernization, and that this commitment be continually strengthened. Likewise, we hope to contribute with others in the improvement of parties and party systems, as an indispensable aspect of strengthening our democracies.

Once again, I would like to thank The Carter Center for this opportunity to collaborate with them in this event, and I look forward to enhancing this and other partnerships in benefit of our common goals.

Thank you.