What is Political Finance?

In the words of Michael Pinto-Duschinsky who is a leading expert in the area of Political Finance “The narrowest definition of political finance is “money for electioneering.” Since political parties play a crucial part in election campaigns in many parts of the world, and since it is hard to draw a distinct line between the campaign costs of party organizations and their routine expenses, party funds may reasonably be considered “political finance,” too. Party funding includes not only campaign expenses but also the costs of maintaining permanent offices, carrying out policy research, and engaging in political education, voter registration, and the other regular functions of parties.

Beyond campaigns and parties, money is spent on direct political purposes in many other ways. A full account would require us to study a) political “foundations” and other organizations which, though legally distinct from parties, are allied to them and advance their interests; b) the costs of political lobbying; c) expenses associated with newspapers and media that are created and paid to promote a partisan line; and d) the costs of litigation in politically relevant cases. Clearly, the number of channels through which money may be poured into politics not only leads to problems of definition and research but makes political financing difficult to control as a practical matter as well. As soon as one channel of political money is blocked, other channels will be used to take its place.  (See Financing Politics: A Global View by Michael Pinto-Duschinsky (2002)

According to the Independent National Electoral Commission Political Party Finance Handbook (2015),

“Political Finance has a decisive effect on the quality of democracy. However, little attention has been paid to the issues of political party funding and electoral campaign finance in Nigeria”.

The PPF Handbook states further that:

“As the sophistication and complexity of communications and other technologies needed to effectively compete for votes increase, so does the need for vast resources by political parties to finance their electoral campaigns in more advanced democracies. In emerging democracies, such as Nigeria, the highly monetised political culture coupled with the ambition of politicians to win elections at all costs has led to an increasing demand on huge election financial outlay. This has resulted in a headlong pursuit of funding sources, fuelled by campaign imperatives which have led many candidates and parties into a tailspin, as political conducts no longer respond to party ethics, principles and beliefs, but rather are increasingly defined by expedience and urgency of fund raising.”

Political finance consists of two broad concepts. They are Political Party Finance and Campaign Finance.

What is Political Party Finance?

These are monies and assets generated by political parties which are used in running their day-to-day activities and other expenditures such as election campaigns. They also include finances that are utilised in the general operations, management and maintenance of the entire party structures.

What is campaign finance?

Campaign finance, raising and spending of money intended to influence a political vote, such as the election of a candidate or a referendum.  According to the INEC PPF Handbook (2015): “Campaign finance is the collection of funds and expenditure in relation to election campaigns. Campaign expenditure is defined as any expenditure incurred by a party for electoral purposes, that is, solely for the purpose of enhancing the standing of or promoting electoral success for a party at a forthcoming or future election.”

The Handbook stated further that campaign expenditure includes any expenditure incurred by a party in connection with the following items, among others:

a.          Political party broadcasts;

b.           Advertisement;

c.           Distribution of solicited and unsolicited materials to the electorate;

d.           Circulation of manifesto or other policy documents;

e.           Market research and canvassing;

f.           Media/ publicity;

g.           Transportation; and

h.           Rallies or other events.

What is Campaign Expenditure Limit?

Many countries limit the amounts that political parties and candidates can spend in relation to election campaigns. The argument for this is often to reduce the advantage of rich over poor contestants and to reduce the overall spending on election campaigns by all actors so as to reduce the cost of elections as a whole.

                                                                                                           (To be continued)

Culled from Resource Mobilization Strategies for Women’s Effective Political Participation Institutionalizing Anti-Corruption and Accountability in Nigeria (2019)