Session by Rolf Alter, Director, OECD Public Governance and Territorial Development Money plays a role both as a channel for citizens to support their candidates or political parties, and as a means for candidates and political parties to reach out to their constituencies. Access to resources for political parties and candidates also shapes political competition. Parliamentarians have an important stake in advancing the global debate on the role of money in politics. There are still many loopholes in political party funding regulations that are open to exploitation by powerful special interests. Loans, membership fees, and third party funding are all used to circumvent spending limits and other regulations. Many countries struggle to define and regulate third-party campaigning leaving them ill-equipped to prevent the channelling of election spending through supposedly independent committees and interest groups. Only a handful of countries have regulations in place for third-party campaigning and globalisation is complicating the regulation of private funding of political parties as foreign companies and wealthy individuals are often deeply integrated with domestic business interests. This OECD report finds that 29% of OECD countries have an independent electoral management body and there is no one-size-fits all model. But whatever the structure, the institutions responsible for enforcing political finance regulations should have a clear mandate, legal power and the capacity to deal with large volumes of work. While data clearly shows that sanctions are effective in improving compliance with the rules, many countries struggle to ensure sanctions that are both proportionate and dissuasive. One clear-cut lesson is that ensuring the effective implementation of political finance regulations still remains challenging in many countries. The Framework on Financing Democracy presented in this report shapes the global debate on risks and policy options, and provides tangible advice for the funding of political parties and electoral campaigns. The report also features detailed case studies of Canada, Chile, Estonia, France, Korea, Mexico, United Kingdom, Brazil and India.

1. FINANCING DEMOCRACY
Rolf Alter
Director, Public Governance and Territorial Development
OECD Global Parliamentary Network
4 February 2016

2. Trust in national government is low
“Do you have confidence in national government?”
Confidence in national government in 2015 and its change since 2007
Source: Gallup World Poll

3. Direct public funding to political parties

4. Banned private contributions by sources
Types of banned private contributions
Which private funding sources are prohibited?

5. Top 20 US campaign donations from foreign-owned firms in 2012
PAC name Country of origin Total
1 UBS Americas Switzerland USD 861 500
2 Anheuser-Busch Belgium USD 806 381
3 BAE Systems (BAE Systems) UK USD 747 000
4 AstraZeneca Pharmaceuticals (AstraZeneca PLO) UK USD 640 452
5 GlaxoSmithKline UK USD 521 250
6 Credit Suisse Securities Switzerland USD 519 000
7 T-Mobile USA Germany USD 473 500
8 Bayer Corp Germany USD 470 000
9 Experian UK USD 426 000
10 BASF Corp Germany USD 411 500
11 DRS Technologies Italy USD 405 300
12 Novartis Corp (Novatis AG) Switzerland USD 330 200
13 Sprint Corp (Sprint Nextel) Japan USD 312 306
14 Accenture (Accenture) Ireland USD 304 500
15 Siemens Corp Germany USD 290 000
16 Ace INA Switzerland USD 281 500
17 Rolls-Royce North America UK USD 272 250
18 Genentech Inc (Roche Holdings) Switzerland USD 269 500
19 Syngenta Corp Switzerland USD 255 000
20 Compass Bancshares Spain USD 249 500
Does globalisation undermine foreign funding regulations?
Many multinational firms are deeply integrated with domestic political system

6. Disclosure of the identity of donors:
Transparency or privacy?

7. Spending limits for candidates and political parties in OECD countries
Spending limits on campaign expenditures

8. What types of integrity package exist?
Countries with a central unit responsible for
monitoring the conflict of interest policies
Specific conflict of interest policy for particular
categories of public officials

9. How is oversight organised?
Do they have a clear mandate, legal power and capacity?

10. Do sanctions for infringements of
regulation work?
Introduction of civil sanctions

11. Financing Democracy: a public good?
• Evidence base: supporting policy debates
with data and good practices
• Focus on implementation and compliance
with regulations
• Apply a broader integrity framework to the
regulation of political finance