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Party Finance and Party Trust -- USA and

Project Statement.

Overview.

This project examines the perception of party finance among the Australian citizens and its effect on their trust in the parties. I hope that the results would enable me to clarify the triangular relations between (a) the widespread views of political finance, (b) the common notion of the parties as links between the citizenry and political institutions, and (c) the trust in party leaders and the institutions they head.

Many contemporary democracies are confronted by widespread citizen disenchantment with their political institutions and distrust of the politicians manning them. Even if, for now, this does not threaten the existence of democratic regimes, the ability to offer effective policy responses to complex problems hinges on widespread support of citizens who believe that governments are attentive to their needs and aim to serve their interest. This, in turn, hinges on the transparency of parties, their engagement of a wide range of social groups, and the existence of leaders who are able to communicate coherent and credible policies. Lack of trust in parties could jeopardize the ability to offer meaningful solutions to problems that are growing in complexity, with a ‘catch 22 ‘effect.

Both the US and Australia are among the countries that are challenged by such a syndrome, with numbers that seem similar at first blush. The Edelman Trust Barometer (2018: esp. 5-6) found, for instance, that one third of the Americans trust government to do what is right for the nation, a decline of 14% since the previous barometer (2017). In Australia the decline was ‘only’ 2 %, but the overall trust in government reached 35%, just 4% higher than the country occupying the Barometer’s last place (for similar results see, among others, Wilke , 2017 ; The Scanlon –Monash Index ,2017: 37-40; Pew Topline Questionnaire , 2017) .

In neither case were the trends totally new. A degree of distrust was discerned already in the 1970s and 1980s, and attributed to the failure of governments to adjust to the “social modernization processes”(Russell, 2005), or what Inglehart (1977, 1990,1997) referred to as the “silent Revolution“ of the shift to self -expressive values in the post –Modernization context. But the drift accelerated in the 21st century, especially as the second decade progressed. This was not directly related to the global financial crisis of 2007-8. In the USA, the dwindling of trust was especially marked after 2010, at a time when the country was in the process of recovery, while Australia escaped the crisis altogether (despite nervousness that revealed itself in losses in the stock market that amounted to nearly 60% peak to trough). Even if economic management, unemployment, and the wage and wealth gaps acquired added saliency, these were not startlingly new issues. Nor were concerns such as gender and minority policies, immigration, global warming and the attendant energy policy. Rather, both countries saw a process of polarization on these and other questions. Among the finding of the AES report of 2018 (Cameron and McAllister,2018: 18,60-74) was the fact that in 2016 only one in ten Australian parliamentarians described themselves as “moderates”; the number of respondents who expressed the belief that “people in government look after themselves “ grew 2 from 49% in 1969 to 74%, and the number of self-described “centrists” fell from 54% in 1996 to 42% (Ibid: 75-6).This ensured the acerbity of the debate, especially in Canberra, as well as the rise of fringe parties dedicated to the pursuit of specific interests. It is significant that 2/3 of the respondents who cast vote for the fringe parties expressed strong support for them, while the number of persistent voters fell from 78% in 1987 to 40% (Ibid:59). The ‘first past the post’ electoral system ruled out a similar phenomenon in the US, but it too witnessed growing polarization between the parties that made compromise rare. In both countries the phenomenon did not impact only interparty relations but also infected the parties themselves. This helps explain the frequent internal party squabbling and power plays that resulted in no less than six Australian Prime ministers in the last ten years. “The Trump Vibe”, as one American journalist stated it, “Spreads Down Under” (Dowd, 2018).

Two basic explanations were put forward for the decline of trust in democratic institutions in the USA and elsewhere. One focused on the gaining of ideological consistency by the parties and their electorates. The formation of ideological syndromes, where positions on the economy, religion, race, immigration, gender equality and other issues became aligned, was promoted by the fragmentation of the mass communication media. The availability of explicitly partisan channels, and the corresponding move towards customization of media experiences, was also abetted by the social media. “Echo chambers”, allowed individuals to participate in and contribute to the standardization of opinions among groups that shared ideological common grounds (among the early proponents of this explanation see Baidassari and Geiman, 2018; Sunstein, 2009; Abramowitz,2010. For recent data see, among others, Prokop, 2017). This spurred as much as it reflected the dwindling of the center in Congress; the distrust of the aims and means of “the other side” that resulted in showdowns between representatives who pay little consideration for the views of their opponents. The adoption of electoral strategies that hinged on the virtual exclusive appeal to the “camp” was already evident in earlier contests, but reached a peak in the elections of 2016 (for the contribution of the social media see, among others, Hanna et. al. 2013. For the campaign of 2016 see Mendilow, 2018). The other explanation concerns the rise of identity politics. The economic and technological shifts of globalization ignited a process of rapid economic and social change that sharpened socio- economic and other divisions and rendered existing concerns more acute. These were further fueled by the new tendency to define politics “less by ideological concerns than by questions of identity”. The left is disposed to focus on the promotion of the interests of a wide variety of marginalized groups (racial minorities, immigrants, ethnic, gender, etc.); the Right concentrates on the protection of privileges and national identity connected to such factors as race, ethnicity, or religion. Democratic societies are thus “fracturing into segments based on ever – narrower identities, threatening the possibility of deliberation and collective action by society as a whole” (Fukuyama , 2018).

The two descriptions are not mutually exclusive, and with due alterations could equally apply to Australia. However, they can serve to clarify what energized the process; it is more difficult to understand how they could work as its primary causes. In theory, compulsory vote in Australian elections releases competitors from the need to ensure turnout, or from the necessity to give voice to the extreme voices in the “camp”, those who in the US tend to 3 participate in primaries. In theory, likewise, the preferential vote ensures that electoral campaigns will be fought in the “center”, over issues that matter most to a majority of constituents. Both the majority preferential instant runoff in single member constituencies (conducted in most state legislatures and the lower house of parliament) and the single transferable proportional representation system (in the Senate) seem to invite contenders to avoid acerbic campaigns and seek the approval of wide circles1. What, then, can explain the decline of trust in the parties and in democratic institutions?

A clue may be found in my research into the public opinion reaction to the US Supreme Court decisions on political finance, and especially Citizens United v. Federal Election Commission (2010) that thwarted all preceding efforts to restrict the influence of big money on elections (Mendilow and Brogan, 2016). Systematic reading of public opinion polls in the years since the verdict, and mass data mining via Google Trends show that the entry of Super PACs and “dark money”, as well as practically unlimited ability to contribute gained by the very rich, is regarded by huge bipartisan majorities as systematic corruption and propelled the issue of what I elsewhere called “civil rights based elected plutocracy” to national awareness. Whether or not Citizens United in effect legalized bribery, as Justice Stevens contended on behalf of the minority in the Supreme Court, the result was paradoxical. Consistent public opinion regards the Supreme Court as emblem of fairness, but the donors and parties who follow its prescriptions as corrupt, with results that grew more evident in the years since the verdict.

In Australia, as in the US, there are no limits on political spending by parties or candidates. Nor are there caps on the spending of groups or individuals who seek to influence elections “from the outside”. No bans prevent contributions by foreign interests, corporations, labor unions, or even government contractors. As Karl-Heinz Nassmacher (2014:257) pointed out, in a manner comparable to Citizens United, the High Court frustrated efforts to ban paid advertising in the mass media (and thereby restrict such advertising to free campaign broadcasts) as contrary to free speech. The supposed restraint of disclosure laws also tended to lack teeth , reflecting a “cultural lack [of interest]—among political actors, those responsible for enforcement, the media, and the electorate at large—that combines to ensure disclosure is neither transparent nor a first order issue”( Orr, 2007:1). This did not change “at one fell swoop”. Technological developments that raised the expenses of party headquarters and the dwindling number of party members who could be counted on for small donations and voluntary work, forced the parties to rely ever more heavily on donations from corporations and “fat cats”. A series of

1 Up to the last elections, voters received party ballot tickets that were registered before the election, to aid them in ranking their choice. In 2016 this was abolished and electors could choose between preference for a single candidate, all the party candidates, or any number of choices in between. However, candidates of one party could still be elected on transfers from voters of others.

4 revelations combined to take a toll of public trust in the political process, and the recent (2017) eruption of suspicions concerning the vulnerability of the political system to foreign influence (in this case, businessmen of Chinese decent ) magnified the mistrust. The adoption since 2010 of new party finance systems by , , and the Australian Capital Territory points to a growing awareness to the problem. Designed to limit the influence of money, the reforms included caps on expenditure and donations, more generous public funding, and tighter donation disclosure regulations. Yet, the Australian law focuses on electioneering rather than on the way parties are run and finance laws leave out party finance year round (Orr, 2016: 60). Will the experimentation with political finance at the sub-regional level suffice to mitigate distrust, at least at the state level? Or will they only direct attention to the “permanent campaign” between elections and magnify doubts concerning the federal level?

We can now return to the overall questions I hope this project will help to answer. Did suspicions as to whether the parties represent the interests of the average citizen sow distrust that was then fueled by polarization and identity politics? And, on the assumption that average citizens are not familiar with the particulars of political finance laws, did the proverbial horse already escape the barn? The literature on what determines public opinion on political finance is exceedingly slim. In the context of the USA it is restricted to two writings by the same authors (Grant and Randolph, 2003 and 2004). The American citizens’ opinion on finance reform, they argue, is heavily impacted by interest groups and parties to whom they belong. In Australia, the single article on the subject (Nwokora, 2015) points out that interest groups matter more in the US than in Australia, while partisanship is less important. The result is the combination of skepticism towards political elites, coupled with the overall retaining of partisan loyalties. Thus , questionnaire of April 2011 (Ibid, appendix) shows that a majority of 63.5 % agreed with the statement “financial contributions to political parties from business give them too much political influence”, a plurality of 43.3 % agreed with the restriction of party funding to public subsidies alone , 88.3% agreed that “political parties should be allowed to spend a limited amount of money on election campaigns “, and only 6.9% (against 81.7% )agreed that “the best thing to do is to remove all restrictions on contributions, spending , and political advertising” . The question, then, is to what extent such opinions led under the impact of the technological and economic shifts of globalization to growing feeling that traditional politicians cannot be trusted to pursue voters’ interest, and how do such feelings relate to “identity politics” that took the place of the search for ever more distrusted compromises. I hope that the answer will enable me to better understand not only the decline of trust in parties and democratic institutions but the reaction of public opinion to political finance.

For obvious reasons, I intend to employ the basic methodologies I used in my earlier study of the USA: 1. Open media sources (especially polls and journalistic accounts). These tend to 5 appear during particular periods (e.g. electoral campaigns or the outbreak of scandals). However, I hope that an examination across several years will enable me to eliminate “noise” and discern trends. 2. Semi-structured but open ended interviews with activists, party officers, and legislators. 3. Crowd sourcing via Google “trends research” that would probe the association of ‘party’, ‘politician’, ‘elections’ and ‘democracy’ with ‘political compromise’, ‘corruption’, and ‘trust’, as evidenced by the analysis of millions of Google searches . The parallel article on the USA elaborated the methodological considerations directing the usage of these sources (Mendilow and Brogan ,2016: esp. pp. 70-77). To these I hope to add 4. Tweeter messages. Since Tweeter opened its platforms, research benefited from the access to communications that are not available only in conjunction with events that could be days apart but as an ongoing stream that affords the opportunity to analyze the relationship between political perceptions and political behaviors (see Jungherr, 2016 :72-91). So far this tool had been used to analyze electoral campaigns in Australia (Axel and Burgess, 2011) and elsewhere (e.g. Sanger and Warin, 2018). I hope to extend its use to the question of trust in parties and democratic institutions.

Personal and professional statement My PhD combined political theory and comparative politics in an effort to examine the Conservative Reaction to the Industrial Revolution in Britain as a mode of response to rapid socio -economic change. My interest in the intersection between ideas and political behavior against the backdrop of rapid change (as well as friendship with Herbert Alexander, the first chair of RC 20, IPSA’s Research Council on Political Finance and Political Corruption) led me to shift my focus to the examination of political finance and political corruption. I maintained however my interest in the effects of rapid economic, technological and social change. Rapid change has a deep influence on beliefs and political behaviors which is noticeable not only in individual behavior but on the world of perceptions on the one hand and connections between individuals and the collective, on the other. These considerations led me to several publications, including my latest edited volume on political corruption in a world in transition and several articles on the impact of rapid change in the crystallization of perceptions of parties in the USA ( e.g. “Gated Digital Communities and the Future of Party Funding” ) and elsewhere. The question of trust in parties and democratic institutions was a natural development and I already engaged in it in articles and books, the latest being Corruption and Government Legitimacy (2016). The present project builds on these interests and brings them to their apex. At the same time, I hope to further my thinking and contributions on both the thorny question of public trust and the challenges confronting contemporary democracies on the one hand, and the thin literature on public reactions to political finance on the other.