Campaign Finance in Central and Eastern Europe: Lessons Learned and Challenges Ahead

Publication Date: 
30 Apr 2002

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Introduction

Political finance not only raises the problem of the relationship between politics and money; it also may have a decisive effect on the development of democracy.1 Thus, the structure of funding of political parties in transition countries is an important area of public policy. A central element in a mature party system is the existence of rules and procedures governing the funding of parties and election campaigns. Political financing is influenced by, and has influence on relations between parties, politicians, party membership and the electorate – relations, which are of profound importance to the quality of democracy. Every democratic system has to regulate the flow of money into politics thus creating the political finance system. This provides the framework within which political parties and individual candidates can use money in politics.

More than a decade ago Central and Eastern Europe started its transition to democracy with the adoption of constitutions that introduced the rights to vote freely and to form political parties. The pluralistic and competitive political process was not the only value enshrined in the transition constitutions, of course – for instance, various social rights such as the right to work, to healthcare assistance, maternity and retirement benefits, and to free education, found their place in many of the East European basic laws. Typically, the ‘framers’ across the region were not occupied with the question of the cost of the rights they were constitutionalising. One of the consequences of their negligence was that many of the constitutional social commitments remained meaningless declarations. In the area of party funding and campaign finance, the constitutions were virtually silent, and left the regulation of this issue to the national legislatures.

During the early 1990s legislators in most of the post-communist countries were not able to regulate the institutions of political parties on a specific or long-term basis, in particular the institution of political finances. The inadequacies of the early funding regime led to the growing dissatisfaction with the systems and their future reforms, before even a decade of democracy in post-communist Europe had past. The lack of complete regulations on political party financing had a significant influence on lowering standards in public life, and in the growth of political corruption. All the substantial issues related to the system of party funding were deferred to a much later date. As a result, the current dissatisfaction with the lack of progress of political life is to a large degree based on perceived problems relating to political finance. Over the last few years, there have been eruptions of discontent with the state of democracy in general2 and with political corruption, frequently associated with political finance, in particular. According to Holmes and Roszkowski, ‘Without relatively crystallised party-systems and comparatively clean political and economic systems, post-communist states will not be able to attain the levels of stability and democracy that Western states have.’