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Financing Political Party

How a political party’s source raise their fund can really dictate their direction.

The prevailing practice in Indonesia is very transactional. Some guy with money can come to a party to ask to support their bid for legislative candidate or regent or governor candidate. The party will agree to support the person as long as he or she gives a certain sum of money, “mahar”. The candidate’s ability is of secondary matter. After all, how do you suppose to run a logistically expensive party machine without money?

This creates the candidate pool with a very similar set of personality: the ones that have enough money to buy their position. Although people can elect their own leaders, they can only do so with predetermined pool of candidate, that is, the ones that can pay the cost. We cannot have a fair representation of the whole society by a biased subset of candidate in this situation.

Another method to finance a political party is by contribution from party member. This will depend on at least three factors:

  • The total number of members
  • The dispensable income of each member
  • The fraction they are willing to spend to contribute to the cause they believe in

The first depends on how big a party is. The second depends on what economic segment a party is strong at. The third describes how militant are the party members.

The first and the second is somewhat in conflict. If a party tries to be strong at the high-income population segment, it risks of being outvoted by the larger, poorer population. After all, it doesn’t matter how many money a person has if he or she only counted as one vote. If a party tries to recruit as many members as it can, the party is either recruiting too many poor members who are effectively useful to extract money contribution from, or having their already richer members average income get diluted by the addition of poorer members as we are running out of richer members and go down the wealth distribution curve.

I am not so sure how to model the third factor, the militancy. How to increase the militancy of party member? If we can answer this, the benefit can accrue far more beyond simply extracting contribution. The members can be deployed for various purposes. Militant members are really useful.

Yet another method is when party runs businesses. I don’t mean that businessman gives a particular party the proceeds of his or her business. What I mean is businesses that is fully owned by the political party which has sufficient profits to finance the political party. I really don’t know why I never hear one. Furthermore, I heard that banks often deny loans to companies related to political parties too. Maybe because if you can run a business that can fund a giant organization like this, why won’t you use the skills to enrich yourself instead?

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