Can we go against the flow of money?

Democratic politics is expensive because parties need to ­organise citizens, to formulate public ­policy and to campaign for office.

But private funding of political parties can lead to political ­corruption ­because money can be exchanged for policy influence, ­licences or government contracts.

The rich can buy access to ­ministers and officials.

Parties with disproportionate access to ­resources can buy votes, monopolise airtime during campaigns, and dispense jobs and patronage to supporters.

Covert funding has been linked to tender irregularities and to the buying of licences.

Money-for­influence scandals have affected the ANC, the DA and the New ­National Party.

Electorally dominant parties can use their control of public and ­private resources to ensure their perpetual re-election.

Controversy has continued over the international sources of party funds, including reported ANC ­dependence on donations from political parties in Libya, China and Angola.

The ANC leadership is concerned about the implications of “money politics” for the liberation movement’s own cohesion.

In ­recent years, money has been flowing into internal party politics where it is used to buy offices and to finance interfactional struggles.

For this reason, the ANC resolved at its 2007 national conference at Polokwane to introduce “a ­comprehensive system of public funding of representative political parties” and “an effective regulatory architecture for private funding of political parties and civil ­society groups”.

This book explores the experiences of Mexico, Botswana, Brazil, Russia and Malaysia to learn ­lessons from their own struggles with these challenges.

The problems South Africa faces – regulating big business donations, ­money-fuelled party factionalism, the abuse of power by party-linked companies and the use of state ­resources for campaigning – are found in all these other countries.

Some important lessons can be learned from them.

First, the usual remedies of ­donation limits, public funding of parties and “transparency” do not always work well – and can make matters worse.

Money can go ­underground and get diverted ­secretly to candidates, resulting in instability within party structures. Dominant parties can secure ­business support easily whereas opposition donors may go underground or even disappear.

New laws must be suited to the implementation capacity the ­country possesses. If laws cannot be applied fairly and easily, ­selective enforcement will result.

Second, internal party contests matter as much as public elections.

In South Africa, there is an urgent need to curb the monetisation of the internal elections – ­especially within the ANC – that determine who wields state power.

Informal transfers from businesses and state-owned enterprises can fuel internal party divisions, fund vote-buying in internal elections, and accelerate factionalism and the personalisation of party ­patronage systems.

New guidelines should be agreed and enforced largely by parties themselves.

Third, the state cannot be considered a neutral arbiter. Factions within governing parties penetrate and control public institutions – even allegedly independent electoral commissions.

Regulation must be rule-bound and non­discretionary so that it lies beyond the reach of partisan and factional politicisation.

Fourth, informal money flows matter more than formal ones.

In middle-income developing countries like South Africa, hidden and often illegal public-sector funding of parties is accomplished by the diversion of revenues from state-owned enterprises, the transfer of public funds to party-owned ­companies, the allocation of state jobs and contracts, “pay to play” conventions that allow only ­donors access to government work, and the abuse of state resources for election campaigning.

Reform of our party funding system is necessary but caution is essential.

If party-funding reform is confined to crude “transparency” requirements and to public funding increases, South Africans could find themselves in a less democratic and more corrupt ­society than today’s.

» Butler edited the book Paying for Politics

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