The Risks of Using Cryptocurrency in Political Financing And The Methods for its Prevention

Regulating and monitoring political finances is an important factor in ensuring a fair and equitable electoral environment, but there are frequent cases of illegal finances, and in the modern world there is a tendency to use digital currencies, which are slowly entering political parties and making political finances monitoring impossible. The Relevant political finance regulations set standards for access to information, which make it possible to process the required information, to monitor it and achieve the transparency of information. Moreover, the Regulation and transparency of funding political processes are important to limit the means of gaining a power through anonymous and illegal sources. The appropriate measures of prevention and coercion serve this purpose in order to make political finances transparent through effective monitoring. Recently, a number of countries have faced the threat of receiving funding from the closed parties and the use of crypto currencies by political parties, and many have begun to think about introducing certain regulations to protect policies from digital currencies. Keywords: political party, political financing, political corruption, cryptocurrency, bitcoin.

Political Finance Assessment of Fiji

Fiji, being a transitional democracy with fragile institutional and regulatory mechanisms, is susceptible to the negative effects of money in politics. Yet for a very long time, regulations related to the funding of political parties, candidates and election campaigns, commonly known as political finance, were largely absent in the South Pacific country. Biased political appointments, corruption in the awards of public procurement tenders, cronyism and capture by business elites are some of the challenges that Fiji is vulnerable to, which thrive in an environment with insufficient institutional and legislative regulation of political finance. This report, which is the first of its kind, has undertaken a systematic study of the political finance regulatory framework in Fiji using an internationally developed, and tried and tested, analytical framework. The study is part of a larger International IDEA initiative to review political finance systems in selected countries in order to advance an evidence-based global policy debate on money in politics.

Financing political parties in Africa: the case of Zimbabwe

What is the impact of access to political party finance – money that parties use to fund their campaign activities – on politics in Africa? While multiparty elections have become more regular in the developing world, many opposition parties are still failing to win elections. This paper argues that poor access to political finance weakens democratic consolidation and negatively impacts the participation of less-resourced candidates who are unable to self-fund. As a result, opposition parties are forced to rely on weak promises of aid from international donors and unreliable state funding. This in-depth analysis of political finance, based on extensive interviews with politicians and government officials in Zimbabwe, political documents, news reports and a review of court cases, reveals that uneven financing has weakened opposition parties and serves as an extra advantage for incumbents.

How Might Digital Campaigning Affect the Problems of Political Finance?

This lecture deals with the intersection between three sets of challenges, each of which constitutes an existential threat to democracies across the world. The first is linked to money in politics, which poses the danger not only of ‘policy capture’ but also, in worse-case scenarios, of state capture by monied interests. The principal question addressed by this lecture is poised at the meeting place between these sets of challenges: How might digital campaigning affect the problems of political finance? Also integrated into the analysis is a third set of challenges: those which arise from the Covid-19 pandemic. This lecture reflects on how the pandemic might shape the impact of digital campaigning on the problems of political finance. Follow the lecture for the conclusion and read also the paper for more details.

Regulating Online Campaign Finance: Chasing the Gost

As the number of Internet and social media users increases, political parties and candidates are spending significant amounts of money on online campaigning. It not only helps them to reach out to more voters with comparatively lower costs, but also allows them to communicate more targeted messages to voters when compared with other traditional campaign tools. Despite the growing use of online campaigns, appropriate regulation of online expenditures is almost non-existent around the world. In fact, online expenditure is one of the key weaknesses of political finance systems and regulatory frameworks. Appropriate regulation of online expenditures will not only protect the integrity of the political process, but also thwart negative effects, such as disinformation and polarization and, more generally, prevent inauthentic activities that usually characterize online campaigns. As online expenditure is a relatively new phenomenon, its regulation is not straightforward and there is no conclusive evidence on what works. This report outlines some of the challenges that policymakers, legislators and oversight agencies face when drafting and implementing laws to include online expenditure within the scope of regulated political finance. It also provides recommendations for policymakers, social media platforms, political parties, candidates and campaigners, as well as civil society actors, on the steps that they can take towards closing the regulatory gap.

Party-Political Financing, Democracy, and Constitutionalism in Ethiopia

Political party funding stands central to the process of democratization, because it affects whether the political playing field is level allowing for electoral competition. However, it can also threaten democracy if party funding regimes allow parties to be captured by private interests or a ruling party abuses its position as the incumbent government to gain access to resources. Adequately regulation is thus required. This chapter examines the interplay of party financing regulation, democracy, and constitutionalism in Ethiopia. Based on the normative framework of political finance in the democratic process, the study finds that badly designed and weakly enforced rules are the main challenges for political finance regulation in Ethiopia to provide a level playing field. The legislative framework and its implementation favours the ruling party, thereby causing a wide discrepancy in financial capacity between the ruling party and opposition parties. Furthermore, political parties are not transparent in their financial matters, as the law requires because the National Electoral Board of Ethiopia (NEBE) is reluctant to enforce the rules requiring such. Finally, the chapter recommends political finance reforms in order to level the political playing field and ensure transparency with regard to the funding of political parties. In this regard, diversified sources of income that combine regulated private donations with regular public funding should be introduced. Finally, the chapter suggests restrictions on the size of financial contributions and also imposing spending ceilings. A reformed legal framework would require, however, that the NEBE enforce it in a rigorously and non-discriminatory manner.

Political Finance Reforms: How to respond to today’s policy challenges?

Money is a necessary component of any democracy: it enables political participation, campaigning and representation. However, if it is not effectively regulated, it can undermine the integrity of political processes and institutions, and jeopardize the quality of democracy. Therefore, regulations related to the funding of political parties and election campaigns, commonly known as political finance, are a critical way to promote integrity, transparency and accountability in any democracy. Political finance regulations must adapt and adjust to political, economic and societal changes. This report contributes to the discussion of the future of political finance by exploring the following trends, opportunities and challenges related to money in politics that need to be taken into consideration when improving political finance systems: • mainstreaming political finance regulations into an overall anti-corruption framework; • supporting the implementation of existing political finance regulations and monitoring their performance; • harnessing digital technologies to ensure transparency and accountability in political finance; and • designing targeted political finance measures to encourage the inclusion of underrepresented groups in politics.

Money in politics: a recipe for corruption in Malaysia

Purpose This paper aims to investigate how money in politics contributes to corruption in Malaysia. Design/methodology/approach This study used in-depth semi-structured interviews to collect primary data. The interviews were conducted with two elite groups comprising seven politicians and seven corporate leaders. Data were then analysed using a thematic analysis approach. Findings The findings indicate how money in politics contributes to corruption in Malaysia. Various types of corruption in the country are identified, namely political donation, bribery and money politics. This study also provides evidence of the underlying factors driving money politics. Practical implications This paper offers valuable insights to policymakers and enforcement agencies for vigorous prosecution or appropriate sanction against the perpetrators. Especially on the weak regulation of political finance in Malaysia, this paper provides insights into how the weakness is used to manufacture corruption. Originality/value This paper provides evidence of how money politics cultivate corrupt activities, which are relatively sensitive and controversial by nature. The rarely obtained views from the elite groups provide a significant value to research.