Political Party Finance: A Source Of Corruption 

Party politics in Nepal have for long been bounded by intense competition power.<br><STRONG><EM>-Tanka Raj Niraula</EM></STRONG>

Jan. 30, 2012, 5:45 p.m. Published in Magazine Issue: Vol.: 05 No.-14 Jan. 27-2012 (Magh 13,2068)<BR>

The political parties are the most corrupt institutions in Nepal, says a new survey carried out by an international anti-corruption watchdog. The study also reveals more than one in three South Asians who deal with public services are forced to pay bribe.


The Transparency International (TI's) report states people in Nepal, Bangladesh, India,  Maldives, Pakistan and Sri Lanka regularly have to pay bribes when dealing with their public  institutions, be it to speed up paper works, avoid problems with authorities such as the  police, or simply access basic services. The report surveyed 7,500 people from 2010 and 2011.Over 53.7 per cent of respondents surveyed in Nepal perceived the political parties as the most corrupt institutions, followed by the legislature and the police as the second and the third corrupt institutions respectively.


People named the political parties as the most corrupt institution as the governments formed after the Constituent Assembly elections failed to control corruption as they had promised before Jana Andolan II in 2006. The report entitled "Daily Lives and Corruption, Public Opinion in South Asia" has named the business sector, media, public officials, judiciary, NGOs, religious bodies, military and education system as corruption-prone institutions in Nepal.


Out of the total 1,044 people who were surveyed to examine the reasons and frequency of  bribe in Nepal, major reason for paying bribe was to speed things up to receive a service  entitled and avoid a problem. Thus it can be concluded that people are sick of paying bribes just to get on with their daily lives, and they are sick of sleaze and undue influence of public servants. So it is an urgent need for the stake holders, constitutional bodies and civil society in Nepal to address this social evil.


Now days, the issue of party finance and political corruption has gained increased international attention, and a variety of officials and activists around the world have  begun to address the problem through public awareness campaigns, legislative initiatives,  reporting requirements, and spending limits. Corruption related to political party funding poses one of the greatest threats to democratic and economic development worldwide. Corrupt election finance practices compromise the greatest asset of democracy: the faith and support of ordinary citizens in the political system. Opaque finances and undemocratic decision-making discourage participation in political parties and encourage cynicism about the prospects for reform.


The concept of party varies widely from north to south, from authoritarian to democratic regimes and from emerging to established democracies. But whatever form political organization takes, there is a common problem: how to find sufficient financial resources to fund the activities the political organizations wish to pursue. Competition between political parties divided on ideological, economic, social, factional or ethnic lines depends on finance; drives up the costs of campaigning and intensifies the search for additional or new income streams. Many observers speculate that political party funding in emerging democracies is often from illegitimate sources. In the past, for those parties orientated towards Communist alliance on the ideological ground, aid came from Eastern European countries- the Soviet alliance, and, for traditional or authoritarian parties, United States supported financially.


Nepalese political contexts

One of the main features of political parties in Nepal is their relatively short history.  Only some were founded before the democratic movement of 1950s and they are the left party, Nepal Communist Party, and, centrist party, the Nepali Congress. Nepal modern political history begins after the overthrow of Rana regime- a family hierarchical system, in 1950 under the leadership of Nepali Congress. After the success of this revolution, democratic set up was established. But the democracy is still in the nascent phase due to subsequent coup- d’états by the monarchy and over extended transitional period. These events can be categorized in three phases. In 1960, then King had abolished multiparty democracy and assumed absolute power with the system of party-less Panchayat regime. Then in 1990, a popular mass movement was organized by the Nepali Congress and United Left Front resulting in the restoration of democracy and constitutional monarchy. Again in 2002 partially and in 2005 fully, king captured the state power giving the security reason to quell the insurgency of Maoists-an ultra-left armed group. The spring uprising of 2006, by the coordination of seven political parties and Nepal Communist Party (Maoist) abolished monarchy. After the election of Constitutional Assembly in 2008, there are three major parties in the political spectrum of Nepal; the Nepal Congress, Nepal Communist Party (Unified Marxist and Leninist) and Unified Nepal Communist Party (Maoist). The Maoist is the single largest party in the assembly at present. The Maoist had even engaged in a long term people’s war from 1996 to 2006. With deficiency of multiparty democratic system to flourish, low levels of economic  development, and traditional political constituencies based on tribal, ethnic, and regional  interests rather than on ideology, Nepalese political systems remain fragile and weak.
The central role played by political parties in the development and nurturing of a virile democracy and its consolidation cannot be understated. Where democracy survives for a long period of time, it is because political parties, among other vital institutions, are well established, and have played the role expected of them. The ability of political parties to attain this feat is the function of how effectively and excellently they are financed, organized, structured and ran on the basis of openness and internal democracy. Other key elements in the flourishing of virile political parties are transparency, accountability, sound ideology, independence, and high level of organizational and administrative structures.


As stated above, Nepal’s major political parties had organized many mass movements and struggle for the sake of democracy in the past inter alia participated in numerous general elections and elections for the local bodies. For these purposes, the political parties require pool of financial means. For political parties to exist and perform satisfactorily they must have income and resources. Therefore, unless the party can generate sufficient income from membership dues and trading or investments there must be alternative sources of income. The Nepalese system of party finance is severely unregulated. Unofficially, it is believed that the Maoist collected fund through looting of banks and financial institutions, forced donation drives and various means during the period of conflict. The Nepali congress, a liberal democratic force in the country is managing its financial constraint through the donation from its political followers and various interest groups having political and economic clout. Similarly, CPN (UML) collects its fund as a levy from its cadres. In 2003, the Nepalese government even proposed to provide financial support from the state coffers to the political parties according to the strength of the vote received in the elections. But this initiative, in order to create transparency, has not been realized in practice so far. 
It will be pragmatic here not to mention about various factions of Madhesh based parties and Rastriya Prajantra Party (RPP). Since, arguably, Madhesh based parties look like that they  are established and function only to fulfill the political and financial interest of their so  called messiahs that is their leaders similarly RPP, a social club of former panchas having  aristocratic background, had worked for thirty years under the shadow of active monarchy and  party less Panchayat system. So, these are still in the process of party building.Ironically, it is understood that the Maoist, which is the party of proletariat is the richest and its expenses are huge and RPP is very weak in terms of mobilizing the financial resources for their parties!


Why Money in Politics?

There is old French saying that money has no smell, but it is becoming increasingly clear that in politics money does smell and, it smell bad. The role of money in politics, especially in funding political parties, has attracted much adverse attention now days. Many countries have experienced major scandals involving political parties and the nature, sources and consequences of their financial support. The central concern is that financial aid rarely comes without strings attached. Money may create expectations of reciprocity and The result can be a form of dependency. In extreme cases, the party is effectively bought and by its financial backers and such dependency is seen as corrupt when it impacts upon the party’s declared mission or purpose. The need for money can deflect a party its stated aims or can constrain it from pursuing policies detrimental to the interests of its most influential financial supporters. In developed contexts, the key necessity for greater financial need to the political parties arises from the extreme competition for campaigning and their financing sources are party followers and charities. Nonetheless what is appropriate, practicable and desirable in a mature democracy and affluent society is not a recipe for all political contexts. Newly democratizing countries are faced with very different political and economic realities, and their systems of political financing are unlikely to match closely those found in stable governance as in Western Europe or North  America. Many new democracies carry with them the baggage or legacy of authoritarian or autocratic rule, with their important influences on political attitudes and relationships, and political parties are challenged by and compete with other social forces. Patterns of party development depend on economic and cultural variations, the nature of the pre-democratic polity and the actual process of transition to democratic rule. But political parties have emerged in difficult circumstances and there are acute problems of party finance and political corruption in developing and transitional countries. In a nutshell, now, the time has ripened to raise and examine some key questions regarding financing of political parties in Nepal which are as follows.

• How the problem of the nexus between party finance and corruption can be addressed and solved?

• To what extent is the high dependence on opaque financial grants and donations to political parties inimical to the process of nurturing independent parties with grassroots support and mobilization?

• What criteria does government use in financing political parties?

• What are the legal and acceptable alternative sources of party financing in the face of increase in the number of political parties, ever expanding campaign expenditure and party activities?

• Does the level of political party activities call for supplementary sources of finance?

• How can political parties prevent the advances of ‘political entrepreneurs’ in influencing their internal and democratic credentials?

• What are the prospects for political parties in their continuing search for credible and acceptable means of generating funds internally?


What are the Solutions?

Democracy makes sense only when its relevant institutions are autonomous and independent of individual or state control; it prospers when the interest of the electorate is safeguarded on matters of public good and policy concerns, as well as socio-economic and political development. A realistic limit on political party spending needs to be set and effectively enforced in order to prevent the influx of illegal sources to the account of political parties. Adequate tracking measures need to be devised and well enforced by the Commission for Investigation of Abuse of Authority (CIAA). Thus, there is the need for the commission to enforce the enabling laws empowering it to regulate political party finances. Although  one of the major causes of corruption in Nepal is poverty and unemployment, in political  parties the phenomenon has been sustained as a result of bad use of money in politics and  the failure, largely due to politicization, of institutions set up to enforce discipline and  fight corruption in the public sphere. For corruption in political parties to be eradicated, the flourishing of the rule of law is needed and institutions like the CIAA must be empowered and allowed to work independent of any meddling by the executive arm of government. In addition, the Electoral Act should be reviewed and become part of it a clause that will empower the Election Commission (EC) to take corrupt politicians to court. EC should also be made to work independently and empowered to disqualify corrupt politicians found wanting even at the party primary level. With regards to party bureaucracy and internal democracy, party discipline should be enforced in order to overcome corruption.  Since the corruption in political parties is learnt by lack of party discipline and lack of definite ideology, political parties should have a well-defined ideology which will serve as the basis for mobilizing support rather than the use of monetary gratification.


Conclusion

Party politics in Nepal have for long been concentrated their interest on the “drama” of politics that is intense competition for power. Politics of ideology is over shadowed by politics of materialism, when the means of getting power is devoid of the conventional tenets of democracy, and the end of politics is seen as perpetual acquisition and retention of power for the material benefit of the few individuals. Nevertheless political parties form the cornerstone of a democratic society, aggregating and representing the interests of citizens to create public policy.  Leaders of Nepal’s political parties must ?nd solutions, not only to the economic and social problems facing their nation, but to the negative in?uences of money, which affect key aspects of their organizational purpose. Although there is growing awareness about the problems of party ?nance in Nepal, solutions have not fully emerged.  Approaches taken in more developed democracies—including legal restrictions, reporting requirements, and public ?nancing of parties—have not proven a panacea; rather, they are tools that can be used should political will and civic pressure make party ?nance practices to a transparent phenomenon.


Niraula is a PH.D. Candidate Department of Economics and Finance School of Social Sciences Brunel University, West London U.K.


 

More on Politics

The Latest

Latest Magazine

VOL 12 No.07, November 22, 2018 (Kartik. 16, 2075) Online Register Number: DOI 584/074-75

VOL 12 No.06, October 12, 2018 (Ashoj. 26, 2075) Online Register Number: DOI 584/074-75

VOL 12 No.05, September 21, 2018 (Ashoj. 05, 2075) Online Register Number: DOI 584/074-75

VOL 12 No.04, September 07, 2018 (Bhadra 22, 2075) Online Register Number: DOI 584/074-75