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Download File POLITICAL FUNDING REGULATIONS IN LATIN AMERICA: UNCERTAINTY, EQUITY AND TRANSPARENCY A Dissertation Submitted to the Graduate School of the University of Notre Dame in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy By Ángel E. Álvarez Michael Coppedge, Director Graduate Program in Political Science Notre Dame, Indiana November 2011 © Copyright by ANGEL E. ALVAREZ 2011 All rights reserved POLITICAL FUNDING REGULATIONS IN LATIN AMERICA: UNCERTAINTY, EQUITY AND TRANSPARENCY Abstract by Angel E. Alvarez Why do self-interested legislators regulate their own finances, allocate public money to minority parties and candidates, impose disclosure rules on politicians‘ financial accounts, and establish penalties for violations of financial regulations? The simplest answer is that politicians regulate political funding to enhance their chances of winning elections. Form this point of view, campaign and party funding rules would be always aimed at providing financial advantages for majority parties and to hinder financial activities of minority parties. The answer is consistent with the mainstream political science literature, but it misses the point that politicians and political parties need money not only to win the election. They need money to endure between elections and to be able to remain in the electoral race. Another response is that legislators regulate their funds if voters demand it. Yet, this other approach wrongly assumes that popularly supported reforms necessarily increase transparency and equity. In many Angel E. Alvarez cases, politicians manipulate scandal-driven reforms to avoid transparency and equity. An alternative answer is that funding regulations are shaped by political parties‘ specific needs for funding. Party organizations and electoral systems could certainly make some reforms more likely than others, but they are both endogenous to politicians‘ anticipations of electoral results. Finally, socio-economic transformations (such as modernization and variations in the size of the government) can also create conditions for reforming. Nonetheless, socio-economic transformations do not provide a specific explanation of the mechanism of policy reform. All the previously mentioned approaches provide useful insights, but their shortcomings suggest the need for a more comprehensive approach to campaign and political party funding regulations. This dissertation offers a model of political decision based on the following premise: politicians not only need money to win the election, but also to protect themselves from future financial drought. If politicians perceive risk of losing the election, they will be willing to enact more unbiased and transparent systems of public funding. In other words, they will ―purchase‖ an ―insurance policy‖ to compensate from losing power and, eventually, financial privileges. TABLE OF CONTENTS LIST OF FIGURES ......................................................................................................... iv LIST OF TABLES ........................................................................................................... vi ACRONYMS ................................................................................................................... xi ACKNOWLEDGMENTS ............................................................................................. xiii CHAPTER 1: INTRODUCTION .................................................................................... 1 CHAPTER 2: THEORETICAL APPROACHES ......................................................... 12 2.1. Public funding of political activities: an overview ........................................... 12 2.2. Theoretical approaches to public funding regulation ....................................... 22 2.2.1. The structural approach to public party finance ....................................... 23 2.2.2. Party organization and funding strategies ................................................. 25 2.2.3. The public interest approach: the role of entrepreneurial politicians ....... 31 2.2.4. The private interest approach .................................................................... 33 2.2.5. Electoral uncertainty ................................................................................. 35 CHAPTER 3: THE MEXICAN CASE......................................................................... 43 3.1. Introduction .......................................................................................................... 43 3.2. The funding reforms in authoritarian Mexico ...................................................... 45 3.3. The reform game in Mexico 1996 ....................................................................... 61 3.4. The amount of money at stake ............................................................................. 79 3.5. Evidence of electoral uncertainty ......................................................................... 87 3.5. Conclusion ......................................................................................................... 104 CHAPTER 4: INCOMPLETE REFORMS IN VENEZUELA .................................. 107 4.1. Introduction ........................................................................................................ 107 4.2. Explaining political funding reforms in Venezuela ........................................... 109 4.2.1. Venezuelan political funding laws .............................................................. 112 4.2.2. Thick regulation and opacity in Venezuelan political funding ................... 130 4.3. Conclusion ......................................................................................................... 159 CHAPTER 5: TESTING EMPRICAL IMPLICATIONS ............................................ 165 5.1. Introduction .................................................................................................... 165 ii 5.2. Variables and data sources ............................................................................. 167 5.2.1. Dependent variables: political funding regulation ...................................... 167 5.2.2. Explanatory theories and independent variables ......................................... 180 5.3. Testing empirical hypotheses on political funding regulations. ........................ 195 5.4. Conclusions .................................................................................................... 236 CHAPTER 6: CONCLUDING REMARKS .............................................................. 239 APPENDICES .............................................................................................................. 249 BIBLIOGRAPHY ......................................................................................................... 279 iii LIST OF FIGURES Figure 1: Percentages of countries with direct public funding by region in 2006 ......... 13 Figure 2 : Percentage of countries with direct public funding by political rights score in 2006 ....................................................................................................................... 14 Figure 3:Level of payout thresholds and percentage of funding, allocated on an equal basis, in Western Democracies, Center and Eastern Europe, and Latin America in 2006. ...................................................................................................................... 17 Figure 4: Lorenz curves of total campaign spending. Mexico, 1994-2000 .................... 58 Figure 5: Political parties‘ share of federal public funding. Mexico, 1989-2000 ........... 60 Figure 6: Extensive form of party funding reform game ................................................ 73 Figure 7: Parties‘ seat shares in the deputy chamber and main events in public party funding. Mexico, 1956-2003 ................................................................................. 89 Figure 8: Parties‘ vote share in presidential elections. Mexico, 1946-2006 .................. 90 Figure 9: Cox‘s index of electoral closeness and Altman & Pérez-Liñan index of competition in the chamber of deputies. Mexico, 1946-2006 ............................... 92 Figure 10: Government Share of Real GDP at 1985 international prices. Mexico and Venezuela, 1950-2004 ......................................................................................... 110 Figure 11: Effective Number of Parties and Electoral Uncertainty. Venezuela, 1958- 2000 ..................................................................................................................... 117 Figure 12: Parties‘ vote shares in Lower House elections. Venezuela, 1958-2000 ...... 118 Figure 13: Majority parties‘ aggregated vote shares as compared to the sum of shares of all other parties. Venezuela, 1947- 2000 ............................................................. 121 Figure 14: Majority parties‘ aggregated seat shares as compared to the sum of shares of all other parties. Venezuela, 1947- 2000 ............................................................. 122 iv Figure 15: Party identification of Venezuelan voters. Venezuela, 1994-1996 ............. 126 Figure 16: Lorenz curves of total electoral expenditure. Venezuela, 1973-1993 ........ 152 Figure 17: Corruption Perception Index. Mexico and Venezuela, 1998-2009 ............. 158 Figure 18: Number of political and campaign funding reforms. Latin American countries, 1946-2008 ..........................................................................................
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