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Reforming the Campaign Finance Regime in India

Distortions in the current campaign finance regime in India, state funding proposals made in various government committees and literature are assessed and an alternative system based on matching grants is devised. This system provides a matching grant based on funds raised by a candidate, who secures a minimum amount of contributions from a certain number of people. These contributions are capped and the grant is deemed to be a loan, until the expenditure receipts for the sum of contributions and the grant are provided. Such a system will help in removing the distortions in the current regime and enable a more corruption-free environment.

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Reforming the Campaign Finance Regime in India

Rajendra Kondepati

the Working of the Constitution’s (NCRWC) Report (2001), Law Commission of India’s Report (1999), the fourth report of the second Administrative Reforms Commission (ARC) on “Ethics in Governance” (2007), the Draft of the National Anti-Corruption Strategy (2010) from Central Vigilance

Distortions in the current campaign finance regime in India, state funding proposals made in various government committees and literature are assessed and an alternative system based on matching grants is devised. This system provides a matching grant based on funds raised by a candidate, who secures a minimum amount of contributions from a certain number of people. These contributions are capped and the grant is deemed to be a loan, until the expenditure receipts for the sum of contributions and the grant are provided. Such a system will help in removing the distortions in the current regime and enable a more corruption-free environment.

Rajendra Kondepati (rajendra.kondepati@ gmail.com) is with the Foundation for Democratic Reforms, Hyderabad.

P
olitical equality is one of the key bedrock principles in any democracy. Guaranteeing every citizen an equal weight in the voting process through elections is designed to put this principle into practice. However, if the political funding process in a democracy is not designed appropriately, this equality could be distorted by lopsided contributions or large contributions from few people or organisations, which compel the policymakers to prioritise the interests of the contributors above those of the citizens. In fact, research in this arena has pointed out that policymakers are induced to govern as if they were maximising the weighted cumulative welfare of citizens and interest groups based on the strength of their contributions (Grossman 1996). The various allegations of political corruption emerging in India are a manifestation of such lopsided political contributions, supplemented with the greed of the players involved.

Equally, these contributions distort the level playing field of the candidates in the elections. Therefore, this research adopts two fairness principles to assess the existing campaign finance regime. First, the regime should be fair to the candidates, assessed by the extent of level playing field available to candidates subject to their worthiness in the electoral process. Second, the regime should be fair to the citizens during the process of governance, thereby not incentivising the policymakers to adopt favourable policies to disproportionately benefit their contributors at the cost of the public at large.

The salience of this issue is reflected by the recent calls for reforms in this arena and the various committees appointed by the government to look into this issue. The Dinesh Goswami Committee on Electoral Reforms (1990), Indrajit Gupta Committee on State Funding of Elections (1998), National Commission to Review

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Commission (2010) and the background paper released by the Law Ministry of India (2010) for National Consultations on political and electoral reforms reflect the emphasis on the need for reforms in this arena.

Despite these attempts, the proposals by the above committees and those in the literature have been found to be lacking in one respect or the other in developing a broader consensus around them. This research attempts to fill this gap and proposes a campaign finance regime, which is fair to the candidates and the citizens and addresses the other various concerns raised during the discourse on campaign finance regimes.

It begins by outlining the current regime and then points out its flaws and proposes that state funding be considered to address these flaws. Before, embarking on a proposal of state funding, the usual concerns against it are brought out, with a review on the existing proposals on such funding. Subsequently, a campaign finance regime is designed to address these concerns and fulfil the two fairness conditions. Measures to reduce campaign expenditure have also been proposed to reduce the financial burden of elections. Finally, the article concludes with a discussion on the shortterm limitations of this regime, but suggests that the ripple effects of this regime would diminish the effects of the limitations in the long run.

Current Regime

Any campaign financial system comprises four policy instruments or their variants, namely, Expenditure Controls, Contribution Controls, Transparency and Disclosure and State Support. The Indian system is characterised as follows (Madhavan and Wahi 2008):

Contributions: Individuals can contribute to parties and candidates without limits;

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companies can contribute up to 5% of the average of their net profits over the previous three years.

Expenditures: The campaign expenditure of Member of Parliament (MP) is capped at Rs 40 lakh depending on the size of the constituency.

Transparency and Disclosure: While filing the nomination electoral, candidates have to file an affidavit with the Election Commission (EC) disclosing their assets and liabilities. They also have to file their campaign expenditure with the EC within 30 days of their election. The parties have to file their income tax returns, with a separate report on contributions above Rs 20,000.

State Support: Donations to recognised political parties are tax-exempt. Besides this, the state gives free media time for the recognised parties. As of September 2009, there are seven parties recognised at the national level and 49 parties recognised at the state level when approximately 360 parties contested the May 2009 general elections (Ministry of Law and Justice 2010).

Drawbacks in This Regime

The main drawback of this regime is that it is fair neither to the candidates nor the citizens. In this section and moving forward, fairness to the candidates refers to the availability of a level playing field to candidates who wish to contest the elections in a legitimate manner, without resorting to illegitimate expenditure like vote-buying or other electoral malpractices.

The instrument of promoting fairness to candidates in political competition in this system is that of expenditure controls. But various media reports suggest that the candidates spend up to 10-20 times the existing campaign expenditure limits. This situation is partly due to the electoral malpractices adopted by the candidates like offering short-term goodies such as cash or kind for votes (vote-buying). In the National Election Study 2009, out of the 5,113 respondents who said they knew about attempts from candidates to buy votes, 65% said they knew people who accepted goodies like money, food and liquor (Lokniti 2009). Besides the illegitimate expenditure, candidates are compelled

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to overshoot the expenditure limit also due to practical necessities of campaign expenditure beyond the legal limit.

Although the EC tries to control this spending, the prevalence of large cashbased informal economy provides ample opportunities for cash to exchange hands. The difficulty in arresting vote-buying practices is mainly due to the positive incentive structure of both the parties involved, citizens and politicians, to engage in it. Voters find an opportunity to reap a short-term benefit, while the politicians anticipate a vote in return for their money. Given this incentive, there are multiple combinations of vote-buying practices through changing the parameters of votebuying like cash or kind, distributor, time of distribution, venue of distribution, etc. For instance, the EC once raided a marriage reception to find that there was no bride or bridegroom. It was an assembly for distribution of goodies for voters.

The other instrument through which the EC tries to ensure fairness to candidates is to ask them to file affidavits on election expenditure, hoping that they would be compelled to file their real expenditure. Though many candidates file such affidavits, they are generally assumed to be false statements at large, as all of them reflect expenditures well below the prescribed limit. Given this situation, the current regime is blatantly unfair to any candidate who wishes to contest elections on a legitimate basis.

While violations of expenditure limits create unfairness in the system with respect to candidates, the prevailing sources of contributions distort the governance process creating unfairness to citizens as well. An estimate of funding sources of the 2004 general elections exemplifies this – corporate donations approximated Rs 600 crore, commissions on government contracts were worth Rs 2,20,000 crore and the presence of mass transfers of government officials (Aiyar 2004). The point to be noted here is that the sources of finance are predominantly illicit ones or come with strings attached. The companies prefer to pay in cash rather than cheque despite the tax benefits, reflecting the illicit nature of donations provided (Sridharan 2006). In view of this, proposals like increasing expenditure limits will not address the

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core issues of illegitimate finance in the political system, but will merely help legalising the additional expenditure.

In terms of reporting contributions, the current law does not require the candidates to declare any of the contributions they receive for their campaigns. The above situation of over expenditures and underreported contributions is a key driver of the high levels of corruption characterised by various quid pro quo arrangements.

In sum, this regime is neither fair to the candidates nor the citizens. This unfairness stems from the lack of legitimate campaign funding sources like small contributions or state funding sources. In view of this, a campaign finance system that incentivises the contributions using state funding is designed to make the campaign finance regime fair in both the dimensions.

Concerns with State Funding

Before outlining the parameters of state funding, it is useful to understand the various concerns that are expressed with respect to state funding proposals.

Any allocation of state resources based on parliamentary seat shares in the previous elections usually benefits the incumbent big parties (Thorton 2003). This concern is especially true in an Indian context with a first-past-the-post (FPTP) or winnertake-all electoral system, if the proportion of seats in legislature is used. The vote share of parties will be relatively fairer to the smaller parties. However, even vote share could run into objections. The bigger parties could have garnered their votes not because the people supported them but because the voters felt the candidates of smaller parties could not win and therefore transferred their vote to the bigger parties with an objective to ensure that their vote matters (Duverger 1972). This issue should be addressed in designing any proposal of state funding.

State funding proposals are bound to alter the power equations within the parties, based on the recipient of funding. If it goes to the party leadership, they are empowered at the cost of the candidates and vice versa. This redistribution issue diminishes in significance if the parties are governed internally through democratic process of candidate selection. However, political parties in India are

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considered to be oblivious of internal democratic principles, and therefore, it is not a surprise that any proposal for state funding necessarily comes with a precondition that the parties adopt intraparty democracy and therefore any new proposal has to take into account this power redistribution. The main issue with this precondition is that parties are reluctant to adopt intra-party democracy and this reluctance partly explains the lack of progress on state funding proposals despite the parties benefiting from a state funding regime through an easier source of finance (Sridharan 2006).

In view of the prevailing perceptions of corruption in the country, the public might be opposed to proposals of state funding, as they would be perceived to be providing the parties and candidates with additional sources for leakages. Another related concern is that it encourages the creation of fake parties, who contest elections merely to divert public funds (Thorton 2003). This concern is present substantially in India. With this concern, the government restricted the incentive of tax exemption given to political contributions only to recognised parties in 2010. While this process weeds out a lot of misuse of this incentive, it is also unfair to the genuine political parties. In view of this, the proposal of state funding should incorporate steps to check any potential misuse, while ensuring support for legitimate new parties.

State funding of parties and elections could reduce participation of the people in the political process by making parties depend on the state for funding (Thorton 2003). However, this concern is valid only if a party is completely reliant on state for its funding and can afford to ignore the participation of public in terms of party membership for seeking contributions.

Issues with Past Proposals

The proposals of state funding already made can be assessed against the above concerns. The Dinesh Goswami Committee recommended limited in-kind support for transport, campaign communication infrastructure and stationery and recommended a ban on company donations. These proposals for limited in-kind support are already in place, yet they do not address the pitfalls of the current regime, as the state funding is inadequate. The Indrajit Gupta Committee proposed pro vision of state funding restricting it to established parties, thereby unfairly promoting the incumbents at the cost of emerging parties. The NCRWC proposed that any move towards the state funding regime be put on hold until political parties adopt intra-party democracy. The second ARC also suggested limited support in the lines of Goswami’s report for recognised parties, but as stated above, it has not solved the existing issues, and the eligibility criteria unfairly benefits recognised parties which are well established over their counterparts.

There are other options suggested in academic literature. Sridharan (2006) has suggested that comprehensive state funding be provided to political parties with a ban on donations from companies. However, this proposal would require intraparty democracy as a precondition, and possibly reduce the public participation in the political process. Moreover, the proposal is biased towards established parties and the issue of misuse of state funding is not addressed. Sridharan (2009) has proposed a new regime with matching grant facility for political parties and a

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ban on expenditure limits, as enforcing the limits has become untenable. This proposal would reward political parties through matching grants based on the amount of small donations they receive. However, when big donations from companies and other private contributors are still allowed, the political parties would have limited incentive to go for small donations, despite the matching grant due to its partial offset by fundraising costs of small donations. Further, this proposal requires intra-party democracy as a prerequisite and is therefore less implementable due to reluctance of political parties. Moreover, this proposal does not address the potential misuse of the state funds.

The Central Vigilance Commission’s (CVC) proposal for state funding also suggests abolishing the limits on election expenditure, as they cannot be enforced. A state fund could be created with tax incentives for donations to the fund and this funding would be provided in kind to the political parties. This proposal also places intra-party democracy as a precondition (Central Vigilance Commission 2010). This reduces its feasibility for implementation. Further, the eligibility

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issues of political parties have not been addressed in this proposal.

The campaign finance regime designed in this article attempts to overcome the drawbacks of the proposals discussed above. It ensures fairness to citizens and candidates or parties, does not rely on preconditions to enable higher political feasibility of adoption and checks the misuse of funds with public participation at the heart of the proposal.

Matching Grant System

Any candidate who provides receipts for a minimum sum of contributions from a certain number of donors will be given a matching grant, subject to verification of the genuineness of contributions. This grant would be considered a loan until the expenditure receipts for the sum of contributions and grant are provided. This matching grant along with the contributions could be used in electioneering, raising further resources and matching grants and so on. The matching grant’s eligibility criterion is also adopted in the United States (US) and Germany. In the presidential primaries in the US, the candidates can seek matching grants for the first 250 dollars of the contributions they receive. In Germany, the parties receive a 38% subsidy in dues or contributions of value less than 3,300 euros (Casas-Zamora 2008).

In essence, raising the acceptable amount of contributions from acceptable number of public is considered the qualifying criteria for public support and thereby the eligibility in this funding scheme. This criterion is employed here, as “contributing money is an important form of political participation that effectively signals the intensity of one’s views. Fundraising appeals to citizens and civil society is a party-building activity and a way to strengthen the leader-follower connections” (Johnston 2005: 6). It is hard to part with one’s hard-earned money and therefore, if people are contributing money to a candidate, they indicate a strong support to him or her. While a minimum number of donations can be considered an indicator of public support, a candidate could resort to raising nominal amounts to become eligible for public funds. This anomaly can be corrected by adding minimum aggregated sum of contributions as an eligibility

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criterion. This eligibility criterion is fair to any worthy candidate who contests the election. If a candidate contesting on behalf of larger parties gets an advantage in fundraising, that is because of existing political preferences of the public and not any distortion created through this proposal.

Alternative forms of funding, namely, grants, advances or reimbursements will run into issues of fairness. A pure grant is given to the parties based on existing vote shares, as every candidate cannot be given a grant. But this system is unfair to the new entrants in the political system. An advance can be given to every candidate contesting the election, as a loan, which is assumed to be cleared if the candidate reaches a certain vote share. While this proposal sounds fair, a candidate has to risk financial indebtedness (in the event of electoral loss) if he opts for the advance. Besides the sources of finance could be suspect. Reimbursements require that a candidate be equipped with adequate financial resources prior to the election. Either way they only benefit the wealthy.

The exact parameters of minimum number of donors and minimum sum of contributions should be arrived at through consultation amongst the political parties. Broadly, the design principle of the minimum number and sum is that they should not be set so low to allow all non-eligible candidates to qualify nor should it be set too high to be unfair to the smaller parties or new candidates who still do not have a large support network.

A prime concern while adopting such a matching grant system would be that it is administratively cumbersome. This system requires designing verification systems and acting with agility within the stipulated period of providing matching grants for seamless continuity in the candidates’ campaigns. However, the competency of verifying money transfers is already present in the system for various purposes of income tax and financial investigations, unlike regulating forms of undesirable expenditures in elections, which is unique to the election process. Therefore, this competency could be tapped for a robust verification process, easing the administrative burden. Moreover, it should be noted that administratively easier systems such as

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advances, reimbursements are unfair on the electoral front. Therefore, there is always a trade-off between electoral fairness and administrative costs. As the notion of democracy places fairness ahead of administrative efficiency, this matching grant system is given precedence over other systems.

Recipient of Funding

Now that the heart of the campaign finance regime has been described, it is time to consider if the parties could be the recipients of funding instead of candidates. Any proposal, which is fair to all the candidates including independent electoral candidates, has to be centred on candidates. Proposals with different criteria of eligibility for candidates contesting on behalf of political parties and inde pendents will run into issues of fairness and potentially invite legal hurdles. Therefore, a candidate-centred system has been designed giving utmost importance to providing fairness in electoral competition, even at the cost of administrative burden.

Contribution Controls

Since this public funding scheme is based on contributions, they need to be adequately controlled to ensure that citizens get a fair deal in the governance process and the rich supporters do not disproportionately garner the fruits of governance.

Only individuals who are qualified to vote will be allowed to donate to the candidates. Drawing from the Canadian and the US presidential election funding systems, this proposal imposes a ban on donations from companies or organisations in general for the following reasons. First, as the eligibility criterion of availing the matching grant is based on public support, organisations cannot be allowed to donate to the candidates, as it is tantamount to allowing disguised donations from individuals who could be shareholders of companies. Second, donations from companies add to the incentives of politicians to continue to keep the economy regulated. The corporations are reluctant to bring their funding overboard because they deem the risk from exposing themselves to the wrath of other parties who could use state power to inflict losses on them to be higher than the tax benefit they get out of donations

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through cheques (Sridharan 2009). Therefore, banning political donations from corporations will reduce the incentive of politicians for unnecessary regulation in the economy.

The contributions should be capped at a certain annual limit (“contribution limit”) so that the candidates with rich supporters do not get an unfair advantage. This cap should not be too low to require substantial fundraising efforts from the public. Moreover, if a cap is too low, the incentive of matching grants with funds raised will not compensate for the substantial fundraising efforts necessary for raising large sums through small contributions. This will push the funding process underground. The EC could be empowered to periodically adjust these limits based on inflation or other related considerations.

All the contributions will have to be deposited into a separate campaign account and expenses withdrawn from that account, through which the election authorities could monitor the system. To ensure the contributions are genuine, they would have to be above a certain “paper-trail limit” (within the contribution limit). They should be made with systems that can be tracked such as cheques, credit card, account transfer or the latest innovations through cell phone-based payment systems, etc.

A lower paper-trail limit would limit funds that could be raised from people who do not usually operate in terms of formal money transfer mechanisms. On the other hand, a high limit would provide more incentives for the candidates to pass off their money as small contributions drawn from the public, although at the risk of getting caught in the verification process. Therefore, the limit should be low enough that the tendency of candidates to pass off their money as contributions is minimised, yet at the same time high enough that a candidate is not disproportionately burdened with fundraising efforts at the cost of his electioneering. These tradeoffs should be considered in designing an optimum paper-trail limit.

An incumbent could use his official power as leverage to raise contributions. This will be unfair to the opponents. Therefore, only contributions near the period of election should be accepted as the ones that count towards this matching grant system.

Again, the period should not be too close to the election that adequate level of fundraising is not possible in a short span of time.

Expenditure Controls

Money power in elections is not necessarily bad. After all, any democratic discourse requires resources. The problem with money in elections is when it comes from dubious sources with strings attached or when the money is spent in illegitimate ways such as vote-buying, which are against the principles of democracy. Therefore, in line with the suggestion of the CVC (2010), all expenditure limits should be removed, with the continuity in ban on illegitimate kinds of expenditure. The existing expenditure limits also result in grossly under-reported figures of election expenditure.

Transparency and Disclosure

The instruments of transparency and disclosure are mainly adopted to prevent misuse of public funds. Different levels of requirements are imposed internationally to verify the genuineness of contributions in election campaigns. The United Kingdom and Canada require that the details of amount and name of the donor be disclosed. Australia requires the address of the donor, to which Spain adds identification requirements. France and the US ask for further details of employer, occupation and date of donation. However, the underlying key principle is that the information provided should be timely, verifiable and comprehensible to consumers of the information (Nassmacher 2006).

The grant would be deemed to be a loan to prevent its misuse, until the expenditure receipts for sums of contributions and grants are provided to the EC. Let us say, a candidate is provided a grant of Rs 10 lakh based on contributions worth Rs 10 lakh and he fails to produce receipts worth Rs 20 lakh and produces only receipts worth Rs 15 lakh the candidate thus has to clear a loan of Rs 5 lakh. In essence, a candidate is not allowed a free run with the money either from the government grants or the public contributions. This check is to ensure accountability of the public funds, whether provided by the government or directly from people.

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Tax Incentives

Given that political fundraising is not a broader phenomenon in India, the public should have appropriate incentives to participate in the process. Besides the obvious incentive that the state rewards their supporting candidates by providing a matching grant, additional incentives could be a tax credit as opposed to tax exemption, which is the current incentive structure.

A tax exemption as in the current system would exempt the contribution from tax calculations. In essence, if a person is in the 10% tax bracket, he gets a benefit of 10% of the amount and similarly with the 20% and 30% tax brackets. Therefore, if people in different tax brackets make the same contribution, the relatively richer person in the 30% bracket is rewarded with 30% of the amount and the relatively poor person in the 10% bracket is rewarded with 10% of the amount.

A tax credit on the other hand is a reduction in the tax directly, which is applied after the tax calculations. This system can be structured to treat every contribution in the same way. If there is a 20% tax credit on every contribution, all the contributions will get a tax reduction of 20% of the amount. This system can also be structured to promote small donations by giving them higher tax credits. Tax incentives have helped in increasing the base of contributors from 86,610 in 1975 to 2,25,376 in 1993 (Casas-Zamora 2008).

The Ratio

The above discussion assumes that a matching grant is an exact match or 1:1 ratio between matching grant and contributions received by the candidate. It should be decided as a trade-off between ensuring adequacy of funds available for campaigning and preventing excess expenditure at the cost of public exchequer.

India does not have a broader fundraising culture as in the US with small contributions; instead people demand money from the politicians during elections. Therefore, the funds including the matching grant might not be adequate for participating in elections. This is a substantial concern and prevalent across parties in Asia (Thorton 2003). However, fundraising provides a democracy with meaningful participation of the people.

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Therefore, if the funds raised are found inadequate for campaigning, enhancing the proportion of matching grant (let us say Rs 150 for every Rs 100 raised) for initial sums should be considered.

On the flip side, if a candidate is extremely successful in fundraising, a question that remains is if he should continue to receive matching grants. Although the expenditure incurred is legal, one might not want the state to contribute to excess electoral spending. Therefore, the matching proportion could be designed in such a way that it goes down with the amount of grant already received by the candidate.

Either way, a good design should take into account the necessities of current levels of election expenditure. But candidates do not reveal the current levels of spending as they are against the law and perhaps because the source of contributions might be questioned. If the parties provide a reasonable estimate of the spending requirements, a progressively decreasing proportion of matching grant could be designed so that adequate state support is received and yet at the same time, the exchequer does not contribute to excess election spending.

If the candidate is not able to participate in the system, it means that he/she is not eligible for a matching grant. In addition, unwillingness to raise funds from the public or to submit receipts for election expenditure could be reasons for a candidate to opt out of the matching grant system. There should be equivalent rules to ensure that such candidates do not have a free run and distort the level playing field in the system.

In view of this, such candidates will also have similar rules regarding their contributions and expenditures. Their contributions should flow to a separate account and be disclosed. There are no limits on expenditures, but expenditures affidavits need to be filed as a substitute for the receipts of expenditures filed by candidates availing the matching grant scheme.

Supplementary Party Funding System

While this matching grant system is centred on candidates, the role of the parties has not been discussed. If the parties have

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different funding rules, it would upset the principles used in ensuring fairness in the electoral process. Therefore, a supplementary party funding system is designed. This could adopt one of the following two options or a combination of them.

First, the parties could still raise funds, yet within the same limits that apply to candidates. This will ensure that funds are not re-routed to the candidates in excess of the limits imposed on them. Second, given that the candidates are funded, there is no necessity to fund the parties for election expenses from the government. Therefore, a vote share based allocation of state funding could be given to the parties for party management expenses between the elections. This system is fairer than using vote share for funding the entire political expenditure of party administration and election campaigns. These proposals would restore the significance of parties when supplemented to the candidate-oriented funding system.

Curbing Vote-Buying

Vote-buying is a serious menace affecting the country and this is cited as one of the reasons why election expenditure is spiralling. Therefore, this practice should be curbed as it is illegal and against democratic values. Ballot reform has been proposed to reduce vote-buying, in the context of Argentina’s experience (Brusco and Nazareno 2004). This is based on the principle that vote-buying is higher when the buyers are better able to monitor the behaviour of their sellers (voters). While secret ballot prevents candidates from observing the individual voter’s behaviour, results tallied at the booth level will provide some inferences to the candidate on how the communities polling in that booth have responded to their goodies.

Currently the voting results of every polling booth are tallied and released (Ministry of Law and Justice 2010). The EC has recommended that the tally be done at larger geographical levels so that there would not be any backlash from the candidates or parties against communities that have voted against them. Any existing backlash only increases if the candidates have indulged in vote-buying practices and yet the voters have not voted in return.

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The level of vote count can be enhanced to prevent candidates from deciphering how a particular community or booth level geography voted. This can be achieved by randomising the identification codes of the electronic voting machines between voting and counting dates. This reform will reduce the monitoring capability of the candidates, thereby decreasing the tendency to indulge in vote-buying and in turn, the backlash.

References

Aiyar, Shankkar (2004): “Rs 11,562 Crore Show”, India Today, 5 April, viewed on 24 February 2011. (http://archives.digitaltoday.in/indiatoday/200 40405/funding.html).

Brusco, V and M Nazareno (2004): “Vote Buying in Argentina”, Latin American Research Review, 39(2): 66-88.

Casas-Zamora, Kevin (2008): “Political Finance and State Funding Systems: An Overview”, Brookings Insitution, Washington DC.

Central Vigilance Commission (2010): “Draft, National Anti-Corruption Strategy”, New Delhi.

Duverger, Maurice (1972): Factors in a Two-Party and Multiparty System (New York: Thomas Y Crowell).

Grossman, Gene M (1996): “Electoral Competition and Special Interest Politics”, Review of Economic Studies, 63(2): 265-86.

Johnston, Michael (2005): Political Finance Policy, Parties, and Democratic Development, National Democratic Institute, Washington DC.

Lokniti (2009): “National Election Study 2009: Findings of the Survey”, New Delhi.

Madhavan, M R and N Wahi (2008): Financing of Election Campaigns: Background Note for the Conference on Effective Legislatures, PRS Legislative Research, New Delhi.

Ministry of Law and Justice (2010): “Background Paper on Electoral Reforms”, Government of India, New Delhi.

Nassmacher, Karl-Heinz (2006): “Regulation of Party Finance” in R S Katz and W Crotty W J (ed.), Handbook of Party Politics (London: Sage Publications), 446-55.

Sridharan, E (2006): “Parties, the Party System and Collective Action for State Funding of Elections: A Comparative Perspective on Possible Options” in P R deSouza and E Sridharan (ed.), India’s Politics Parties (New Delhi: Sage Publications), 311-40.

– (2009): Electoral and Party Finance Reform, viewed on 10 August 2011 (http://casi.ssc.upenn. edu/iit/ eswaransridharan).

Thorton, Laura L (2003): “Introduction” in Manikas P M and L Thorton (ed.), Political Parties in Asia, National Democratic Institute for International Affairs, Washington DC, 5-40.

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