Narrowing or Widening the Fountainhead of Corruption?


One of the oldest tenets of corruption theory is that election campaign contributions constitute the fountainhead of corruption in government. To repay that three million dollar contribution of BankX, elected candidate X proposes a bill to lower taxes on bank profits. Simple stuff.

Conventional thinking is that if you eliminate this patron-client relationship by financing campaigns with public taxpayer money, the result will be less corporate influence and corruption in government. But at what cost?

Mexico’s system is completely publicly funded, meaning that parties receive money from the Federal Electoral Institute on a proportional basis (based on representation) and cannot accept donations from other sources. The system costs taxpayers over two billion dollars (between 12 and 13 billion pesos per election) per presidential cycle–one presidential and one midterm election.

The U.S. system is privately funded and the result is massive corporate influence in politics, but at the very least  taxpayers do not have to pick up the tab directly (although they may pay for it indirectly through bad policy or tax cuts and privileges for corporations). In 2008, the most expensive election ever, the U.S. spent $2.8 billion on elections. Per capita, this is about twice what Mexico spends on a presidential election, in real terms, unadjusted for purchasing price parity.

A few days ago, the government of Dilma Rousseff deployed its majority in the Committee on Political Reform to pass public financing— the first step to a plenary vote and its ultimate approval as law. In partisan terms, it’s a good time for the government to advance public funding: financing is based on current representation in Congress, and because the government of Dilma Rousseff has an overwhelming coalition majority, the governing parties will be the recipients of most of the public funds to be doled out in the coming election. Traditionally having benefited from the favor of the private sector, the PSDB and parties in the opposition unsurprisingly voted against the proposal.

The pressing question is how much publicly-funded elections will cost in Brazil. Given that there are close to 30 political parties represented in the National Congress, funding might get complicated and imply heavy costs. Under one of the heaviest tax burdens in the world, can Brazilians afford to pay for such a system?

2 thoughts on “Narrowing or Widening the Fountainhead of Corruption?

  • Canadian formula for funding, partially government funded with limitations on size of private/corporate donation, seems to work reasonably well.

  • Dr. Michener , I see some red flags here and this is no amusement park. This sounds like just another scheme to divert money from the government coffers to politicians and their lackeys. I see a compromise ahead that would enable the parties to nurse off the public bosom and still take money from the private sector. The argument for campaign donations as a form of speech is strong, couple that with a equity in funding argument and turn on the spigot. Even without the public/private combo scheme. It is a short step to government control of political parties!
    Every system of political party financing is fraught with downsides but what does government really do well?

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