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The Europeanization of Party Financing in Georgia

Dr.Natalia TimuşMaastricht University

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Outline• Introduction• Why bother?• What?• How?• Empirical findings• Policy recommendations• Conclusion

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Money and Politics

Blessing or curse?

Example: Public funding

+ political pluralism - asymmetric electoral

competition

+ objective treatment - political corruption of political parties (public office abuse)

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Why bother?- Illicit party financing – increased salience during

the integration of post-communist democracies into the Council of Europe (CoE) and the EU

- No adequate mechanismsof party financing =>

‘buying’ political influence

democratic instability

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Why Bother?

- The degree of Europeanization of Georgian legislation on party financing – ignored aspect

BUT

- important for assessing democratic and pro-European reforms & fulfillment of international commitments

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What?

Research Question:

What is the degree of compliance of Georgian legislation on party financing with the European standards set by CoE?

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How?

- Focus on Venice Commission of CoE

The European Commission for Democracy through Law

- Georgian legislative framework: laws on political parties and electoral campaign financing

- Time-period: 1990s – 2010

- Qualitative Methodology:• Process-tracing

• Content and discourse analysis

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Theoretical framework Broader research project:

Europeanization of party legislation (since 2008)• Bridging International Relations and Comparative

Politics• Beyond the ‘EU-ization perspective’, ‘broader

Europeanization’ process• Conditionality literature

– Clarity of requirements– Size of rewards and sanctions

• Party politics literature:– Party strategic behavior vs. principled oriented behavior

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HypothesesH1. Clarity matters:

The lower the degree of clarity of European requirements on party financing, the higher the degree of discretion of domestic political parties in legislative compliance

H2. “Carrots and sticks” (Incentives and sanctions) matter:

The lower the incentives and sanctions from the side of the Venice Commission, the lower the degree of legislative compliance

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European standards on party financing

Key VC documents:1. Guidelines and Report on the Financing of Political

Parties (2001)

2. Opinion on the Prohibition of Financial Contributions to Political Parties from Foreign Sources (2006)

Critical assessment:- Broad principles, ambiguity- lack of guidelines regarding their practical

implementation- Lack of incentives and sanctions – ‘soft laws’

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European standards on party financingPublic funding Private financing Electoral campaign

financing

For each parliamentary party * could extend to extra-parliamentary parties

interdiction of donations from foreign states and companies* Foreign donations can be accepted if they do not inhibit the effective democratic development

  fixed limit for party financing

objective criteria for distribution of funding

possibility of donations from the nationals residing abroad

distribution formula (proportional to the number of electoral votes)

 transparency   transparency    transparency

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Transparency International principles on effective enforcement of party financing

(2009)• respect of the rule of law• clear, realistic and accessible rules (updated)• effective & independent internal auditing• regulating agencies must be independent and

have to be supervised, in their turn, by an independent entity

• the regulating authority must have adequate powers to monitor and supervise party financing, but it also must be subjected to legal responsibility.

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Pre-revolutionary period Post-revolutionary period Latest VC recommendations

Georgian provisions Georgian provisions

Public funding

Art.30 of Organic Law (1997):- parties and blocs >5% votes* in 2000 – abandoned, subsidies for individual candidates

Amendments 2006:- parties and blocs with 4% (national) and 3% (local)2008: - increased subsidies for opposition parties- fixed regressive distribution - Foundation for Development and Reform (FDR)

- stability of law- avoid textual contradiction &synchronization of different laws/amendments- clarification of the legal statute of FDR, financing mechanisms, relations with other institutions, etc.- greater transparency

Private funding

Art.25-28 of Organic Law (1997):- max. quota private donations- no max. quota for membership fee- prohibition of foreign donations- no interdiction of anonymous donations

Amendments 2006, 2007:- register all the donations- identification of donors- bank transfer- limit on individual donations- interdiction of anonymous donations

- stability of law- greater transparency

Campaign funding

Election Code of Georgia (2001)- interdiction of foreign donations- sanctions in case of violations- private audit company for electoral funds

Amendments 2007:- monitoring group of electoral finances- no monitoring mechanisms- no clarity on responsibilities & obligations of monitoring group2008 & 2009:- special clause on prohibiting ‘buying votes’

- stability of law- no abuse of public office for campaigning- disclosure of campaign funds before, during, and after elections- concern with disproportionate and potentially troublesome sanctions - a clear definition of responsibilities and obligations of the monitoring group

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The evaluation of the implementation of VC requirements

- Overall - considerable progress in complying with the European standards on the financing of political parties

- More reforms in post-revolutionary period

- party financing: one of the few cases of constructive dialogue & agreement between opposition and governing parties (2006, 2008)

- the majority of reforms: since 2006 (EU-Georgia AP) => the merit of EU leverage on compliance to European standards

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Policy recommendations– Clarity of requirements on party financing:

• avoiding abuse of public office• detailed clarification of sanctioning procedures• limits for financial contributions from parties to their own

electoral fund and for membership fees– Effective enforcement & efficient monitoring process (TI)

• Foundation for Development and Reform• institution with the authority of financial regulation (e.g. CEC)

– Guaranteeing transparency and public accountability:• Ad-hoc group on financial monitoring of campaign• regular procedure of disclosure and reporting of income

sources of electoral contestants• public access to party financial declarations

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Conclusion• Clarity, incentives and sanctions matter:

– VC has high potential for triggering legislative compliance, but its mechanisms are of permissive nature, lacking some feasible sanctions & rewards

– EU’s leverage indirectly increases the legislative compliance to VC standards

• Georgian case – confirms the need to examine the ‘broader Europeanization’ process and move outside the usual suspects

• More research on the following questions:– cooperation of European institutions and their common

democratic leverage– domestic political and context specific factors determining

the legislative compliance to European standards

Thank you!

Questions