Political party financing regulation and gaps for corporate donations: Case of the developing country

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Abstract

The excessive corporate involvement in funding political parties jeopardizes the quality of performance of political parties (Mietzner, 2015). This paper aims to analyze the extent to which existing regulations govern the finances of political parties and to find gaps that corporations and political parties often exploit. Moreover, this paper practically seeks to provide practical policy recommendations. This study used qualitative methods, including in-depth and semi-structured interviews with seven purposefully selected informants. This study also involved library research through the collection of various regulations, factual data, and expert opinions from various secondary sources, namely the government and non-governmental organizations. The study found that existing regulations play a very limited role in maintaining the integrity of political parties. The issues found range from irrational donation limits, unregulated spending limits, and incomprehensive financial statements, as well as low supervision and law enforcement by election organizing agencies. Criminal acts against organizations, committed by both corporations and political parties, are still left unaddressed by the law enforcement. Therefore, this paper recommends the formulation of a law that specifically regulates political party finances. Independent institutions that can oversee the parties’ finances as well as legal breakthroughs is also essential in promoting transparency and honesty.

Keywords: Corporate Donation, Political Party Finance, Party Regulation, General Elections, Election Management Bodies

Authors’ individual contribution: Conceptualization — T.I.; Methodology — T.I. and A.G.P.S.; Validation — T.I. and A.G.P.S.; Formal Analysis — T.I. and A.G.P.S.; Investigation — T.I. and A.G.P.S.; Resources — T.I. and A.G.P.S.; Data Curation — T.I.; Writing — Original Draft — T.I.; Writing — Review & Editing — T.I. and A.G.P.S.; Visualization — A.G.P.S.; Supervision — T.I.; Project Administration — T.I. and A.G.P.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G38, H83, K16, K49

Received: 08.02.2023
Accepted: 03.01.2024
Published online: 08.01.2024

How to cite this paper: Ilham, T., & Sari, A. G. P. (2024). Political party financing regulation and gaps for corporate donations: Case of the developing country. Journal of Governance & Regulation, 13(1), 28–41. https://doi.org/10.22495/jgrv13i1art3