The financing of politics – corrupt, whichever way you look at it?

Sam Power, an ESRC-funded PhD student at the Sussex Centre for the Study of Corruption, ponders the challenge of crafting a corruption-free party funding regime. No easy task …

Tuesday 18th September saw Transparency International and the Political Studies Association host a symposium entitled ‘Corruption with Research Impact’. The event also marked the launch of a new PSA specialist group on Corruption and Political Misconduct. The event covered some interesting and at times difficult territory; what can practitioners legitimately expect from academics in terms of policy- (and in this case corruption) relevant research? What (in terms of data and access, for example) can academics expect from practitioners? Tricky questions. The first panel of the day involved a discussion by leading academics that gave an overview of research being done on corruption and integrity in Britain today. Dr. Liz Dávid-Barrett (a recent signing by the SCSC, incidentally) argued that one of the key areas that future research should focus on was institutional corruption, and that one key part of this mosaic is corruption in party finance. Indeed, she suggested that academics should be engaging with questions such as is party finance inevitably corrupt? Now since that question is very much in my own particular academic wheelhouse, I thought it might make sense to discuss some of the key themes and challenges that the question presents. In a previous post, I outlined problems with the funding of politics and tackling corruption, so I’ll try my level best not to ‘double-dip’ on any of the points made then.

The first thing to note is a simple inevitability – for parties to survive they need to be funded. It can be privately, it can be publicly or it can be a mixture of the two, but there is a need for some sort of funding regime. The main reason for this is that, in an almost uniformly Europe-wide trend, party membership is falling to such a level that parties simply cannot raise the revenue to be self-sufficient (see here for more on this). Previously, I outlined the fact that many advanced democracies adopt a system of state funding, because of the (in my view under-researched) belief that it represents a necessarily less corrupt form of party finance. Further, that what is more important is the kind of corruption challenge that state funding represents and if it is (as I suspect) a different corruption challenge than that posed by private funding. Measuring levels of corruption can only get us so far, at some point there needs to be a distinction between types. Which brings us back to the question at hand, if neither state nor private funding are able to deliver corruption-free party finance, then surely party finance itself is inevitably corrupt. So what is to be done?

Firstly, and importantly, expecting anything – let alone party finance – to be ‘corruption-free’ is wishful thinking of the highest order. Therefore, it is important to distinguish between the notion that party finance is inevitably corrupt because politicians are all lying, cheating, snout-in-the-trough, self-serving scumbags, or what Matthew Flinders (more eloquently) calls the ‘bad faith model of politics’ and a competing, more realistic, argument that party finance is inevitably corrupt, but on the whole politicians do not abuse power, and are honest people performing a vital public service. This does not mean, as Flinders rightly notes, that we should ‘dismiss valid concerns regarding the operation of democratic politics or the behaviour of some politicians; but it is to place these concerns in context in an attempt to foster a more balanced debate’. This distinction is key. Accepting the premise that party finance is inevitably corrupt does not necessarily entail holding a negative view of politicians and the political elite, it merely involves facing up to the fact that certain corruption challenges are inevitable.

This runs parallel to a second important consideration that when it comes to corruption, public perceptions matter and are often unrealistic. As Flinders argued in a previous article, there is an ‘expectations gap’ – the difference between what is demanded, and what can realistically be achieved. Further to this point, Jennifer van Heerde-Hudson and Justin Fisher use data (see here) generated from YouGov’s online panel to show that the public has little knowledge of the British party funding regime, that this ignorance was no barrier to hostility towards the system and that attitudes to party finance broadly fall into two camps – those that are ‘anti-party finance’ (parties, and by extension politicians, are inherently corrupt and waste money) and ‘reformers’ (those that feel the existing party funding regime is unsatisfactory, but support further reform). The headline finding is that the British public ‘knows little of party finance and, consequently, public opinion is unlikely to offer a rational course of action for effective reform’.

The argument here is not that the public should never be consulted about potential change, or that the public does not understand politics, it is more that public opinion should not serve as a gatekeeper, at least in terms of party finance reform. As van Heerde-Hudson and Fisher highlight, the only acceptable party funding regime according to public opinion is one that is entirely funded by membership subscriptions – a system that never really existed in the Britain and, as previously mentioned, is simply unworkable. This also serves to further show the damage that the ‘bad faith model of politics’ can have on the effective working of the political process and, perhaps explain, the gulf that their seems to be between the ‘public’ and ‘politicians’. The ‘bad faith model of politics’ damages people’s perceptions of political institutions and can cause the public to see everything as corrupt. In terms of party finance, this leads to little or no distinction between what can be considered a corrupt or legitimate exchange and corruption, it would appear, is seen to be everywhere.

To return to the question that Liz David-Barrett posited on 18 September, is party finance inevitably corrupt? Well, yes. However, this argument should not be considered a value judgement on politicians or the political process in this country. It should be understood as an acceptance that any system of party finance presents unique corruption challenges. By dismissing politicians themselves as inevitably corrupt, we not only do them a disservice but damage the potential for significant, effective reform. At the end of my last blog post I called for an improved discourse between the media, the public and politicians regarding corruption in the UK – a conclusion I suggested was a cop-out. I’m afraid little has changed and the conclusion still stands (sorry!). Ultimately, it is important, no, vital, to realise just how imperative it is to engage with this question and to do that one should try one’s level best to attend these symposia and engage in these debates.

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Corruption By Degree: China’s Crackdown Moves to the Academic Sector

The financial crisis of 2008 brought China’s decades-long reliance on cheap manufacturing exports to induce extraordinary growth and savings rates to a spluttering end. The plan henceforth is to stimulate domestic-led growth through science and innovation. The result is that China’s universities and research community is now more important than ever within the broader Chinese national vision and economic reforms. And hence, the academic sector is now in view of China’s corruption investigators. This piece introduces the nature of the corruption, and some examples of the ongoing crackdown.

Corruption in the academic sector in China applies mainly to capital expenditure, admissions and staff promotion. The least complex and most common area of corruption is said to be within campus-related construction and the purchase of goods and materials. University budgets for campus modernization have recently expanded. Related contracts have been awarded in some cases without proper tenders. This produces opportunity for nepotism and embezzlement of funds, which is said to take place with collusion from local and provincial officials.

Student admission processes are similarly said to be imperfect. Universities have permission to select a minority of students via interview and other selection methods, rather than through the national entrance examination process. It is this intake quota that is the most open for exploitation. In response to accusations of unfair entry for some students, the Ministry of Education has called for universities to publish the credentials of their students, including recording of entrance interviews and publishing their entrance exam scores. Universities found to be abusing the propriety admission process may be excluded from being able to use it. Prestigious Renmin University in Beijing is an example of an elite university that has been caught up in a number of entrance scandals.

The national college and graduate college entrance exams also face persistent threats of corruption. In the national graduate entrance exam held in the first week of January 2014 for example, 223 students in the north-western province of Heilongjiang alone were found to have violated exam regulations. 196 of these cheated using communication devices.

A well-covered case of such cheating involved the Harbin Polytechnic University’s MBA entrance examination. Since such devices are only allowed through with permission from exam officials, it is thought that university officials colluded with training centre officials responsible for hosting the entrance exam. Chinese media reported that some students were led to one room, and others to another, with one room allowing the use of such devices. Two admissions offers are currently suspended, and the entire MBA program on hold.

Within the university sector, it is also reported by Chinese media that promotions, tenure and titles are all available to be bought and sold for the right amount of cash.  Plagiarism between Chinese researchers and from non-Chinese sources is also rife. The Ministry of Education has called for “zero tolerance” to plagiarism. The Ministry of Science and Technology stripped a professor of a national prize in 2011 because of plagiarism.

Illustrating the government’s determination of crackdown on tacit permission given to such activities within the university system, are recent high-level investigations.  In December the Vice-President of Zhejiang University was arrested and suspended on suspicion of occupational crime. The vice president of Sichuan University was placed under investigation for suspected serious discipline violations in December.

China’s higher education reforms follow the 2010 “National Outline for Medium and Long-Term Education Reform and Development (2010-2020)”. This calls for the acceleration of the development of world-class Chinese universities. The success of the plan is necessary for realising China’s broader innovation goals that in their own right are now crucial for China being able to continue raise the standard of living across the country. The degree of success of the crackdown will impact not only the value of a Chinese degree going forth, but also the success of China’s intended economic transformation – and none less thus than the future of the world economy.

Lauren Johnston received her PhD in economics from Peking University, and is an expert on the Chinese university landscape. Indeed, it is unlikely that there are many native English speakers who know more about Chinese universities than she does. Lauren edits an online newsletter Sinograduate that offers in depth analysis of Chinese higher education issues. It is a genuine ‘must-read’ for anyone interested in this rapidly expanding sector. Lauren can be contacted at info@sinograduate.com

Doughnuts, paper clips and door mats; MPs expenses claims are back in the news

Knowing what works in terms of tackling corruption is not easy.  In some places, it is straightforward enough to pinpoint what the problem is – a politician using an expenses regime for personal gain in order to, say, clean his moat or to renovate a duck house, for example – but finding a new set of processes to put that right can be surprisingly tricky.  Even now, five years after the MPs’ expenses episode originally hit the headlines in the UK, the story continues to run.  The Daily Mail (see here) ran a story on Saturday 25th January 2014 bemoaning not just the pettiness of claiming  30p for a jam doughnut (Rosie Cooper, Labour – for the record, I’d very much like to know where these 30p doughnuts are available, as that is an excellent price) , 4p for travel (Tristam Hunt, Labour), 7p for a paper clip (David Cameron, Conservative), 49p for a door mat (John Barrett, Lib Dem – are MPs now shopping at Poundland? That’s a super deal) and 19p for Blu-Tac (Pat McFadden, Labour).  The pettiness of some of these claims to one side, the Mail was also enraged as they (the MPs) simply “don’t seem to get it”.  What precisely they don’t “seem to get” remained tantalisingly unclear, as no effort whatsoever was put in to outlining what the perfect expenses regime would look like.  That, it seems, is not the Daily Mail’s job.  It’s much more straightforward to point out some of the quirks within the system, some of the grey areas and some of the more bizarre claims.  Ideas on how to put this right?  No suggestions forthcoming.

It is easy to see both why voters will be annoyed at seeing MPs claim money back on the most trivial of things and why the Mail (amongst others) refuses to outline how we might move this debate forward.  The ‘new’ post-2009 expenses regime, headed by the Independent Parliamentary Standards Authority, is undoubtedly tighter and better regulated than the system that came before it, but making value judgements on what is and what is not an acceptable expense is actually very difficult.  MPs have long grumbled that IPSA is a bureaucratic nightmare, although few have dared say that in public.  IPSA’s challenge is to create a system that can be consistent, fair and flexible.  MPs have different needs (i.e. if your constituency is Newcastle upon Tyne Central then you should surely be entitled to claim more in travel costs than if you represent, for example, London-based Twickenham) and they face different challenges in their daily work patterns; the expenses system needs to reflect this and needs to be quick enough on its feet to recognise the difference between legitimate and illegitimate claims.   If anyone reading this blog thinks they have the answer, then IPSA will no doubt be very keen to hear from you.

On an altogether different note, the first week of the new term is always an exciting time for students on Sussex’s MA in Corruption and Governance.  Why?  The internship and project part of the course commences.  And, 2014 sees no less than 14 students involved in such things.  Hazel Stephens and Kim Castle began working this week with police officers in the UK’s International Proceeds of Corruption Unit at New Scotland Yard (see here for an example of how the IPCU works), whilst Sam Weatherill has joined up with the All-Party Parliamentary Group (APPG) on Anti-Corruption in Westminster.  Michael Badham-Jones, Francisco Ortiz and Felicitas Nuehaus will be working alongside the Overseas Anti-Corruption Unit (OACU) in the Square Mile, and no less than two different groups of students will be doing projects in conjunction with Transparency International in Berlin.  Exciting times ahead!

Dan Hough

Director, Sussex Centre for the Study of Corruption (SCSC)