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Democracy or Money-tocracy?
There has been controversy recently over the Tax Directorate's request that those who contribute money to a political party posses a tax registration number (NPWP)
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There has been controversy recently over the Tax Directorate's request that those who contribute money to a political party posses a tax registration number (NPWP). The move is on the right track but misses the big picture. Its not just about registering additional taxpayers or getting more tax money, it's about the urgency of preventing a rise of a money-tocracy.
Campaign contributions are a delicate interaction between democracy and capitalism. In democracy, every citizen is equal and each eligible voter has only one vote. In capitalism, on the other hand, one dollar equals one vote and so the owner of the greatest share, even if its only one person, can determine the path of a company.
All would be fine if democracy was practiced only in politics and capitalism applied only in business.
But politics and political parties need money to organize, conduct activities and advertise to garner votes. If they are banned from collecting money then the political system as a whole would be weakened. But if no regulations are in place then democracy will turn into money-tocracy, and the side with the most money will win.
The classical, rational-choice theories of voter participation posit that individuals weigh the be-nefits of voting against the costs. The benefits of voting consist of the satisfaction of the act itself and the expected change in the outcome of the election that results from one vote.
The costs of voting include the time and effort required to actually cast a ballot - registering to vote, becoming informed about the position of candidates, finding the appropriate polling place, and queuing to vote, for example.
But more recent and realistic theories posit that elections are like a business. The investors and campaign contributors reap most of the benefits in the form of favorable policies once their candidates is elected and the workers, the regular voters, simply conduct their civil responsibilities.
In the U.S., one person can legally contribute no more than US$2,300 (Rp 25 million) to a political candidate and $28,500 (Rp 350 million) to a national party in one election cycle.
Corporations and labor organizations may not make contributions or expenditures in connection with federal elections, but they are allowed to establish political action committees (PAC) that can contribute to a candidate or national political party, but with a limit of $5000 (Rp 60 million) for individuals and $28,500 for parties.
In the United States, The McCain-Feingold Law was enacted to strengthen the role of small donors and dilute the influence of rich individuals. People are not permitted to be much more equal than other in terms of political influence just because of their wealth.
But what about Indonesia?
Indonesia's next election is expected to see the participation of more than 171 million registered voters and 34 political parties. Election law no 10/2008 stipulates that one person can give up to Rp 1 billion ($77,000) in campaign contributions - individual candidates and political parties are not separated. Furthermore, corporations and business entities are allowed to make campaign contributions of up to Rp 5 billion.
How can it be that with an income per capita almost one tenth that of America, Indonesians are allowed to give twice as much money per person and more than ten time as much per corporation? Are Indonesians one hundred times more honest and pure than Americans?
The Obama campaign got almost half of its staggering campaign funds from small donors. Instead of coddling big money interests, Indonesian politicians need to be directed to approach the people that they asking to vote for them for money.
Lowering the limit of campaign contributions and increasing transparency is a very important step to strengthening ownership of democracy and reducing cynicism toward politics. We should also require individual candidates to report the sources of their campaign funds and upload contributor lists to the Internet.
The Indonesian election is coming soon, may democracy win.
The writer is a PhD candidate at the economics department of the University of Siena, Italy and a lecturer at the Masters in Public Policy program at The University of Indonesia.
