Political party financing in Indonesia is a recipe for corruption
October-December 2013
By: Marcus Mietzner

And although the subsidies-toexpenditure ratio shrank continuously, new regulations tightened the accountability mechanisms for the use of the money. The 2011 party law requires parties to spend portions of the money on political education rather than operational expenses, and the financial reports are audited by the State Audit Agency (BPK). It should be added, however, that party branches at the local level have received additional money from provincial, district and municipal governments.

In some cases, these subsidies have been significantly higher than the Rp 108 per vote paid at the national level. But there is no systematically collected data on the amounts paid out to party branches in Indonesia’s 34 provinces and approximately 500 districts and municipalities, so it is difficult to know the total figure. Furthermore, whatever is paid to local party branches is likely to be used to offset the high costs of parties contesting the hundreds of local elections that take place each year; it is therefore not used to build stable, coherent and institutionally healthy parties.

Deficiencies in the party financing system

As we have seen above, both old and new democracies have developed institutional responses to the parallel developments of declining party memberships and rising campaign costs. Indonesia’s response, however, must be viewed as highly deficient. None of the three elements of Indonesia’s post- Soeharto party financing system provides a solid foundation for funding political operations.

First, the idea that parties can (and therefore should) fund themselves primarily through membership fees has long been shown to be unviable — yet it is perpetuated in all party laws and regulations. What’s more, the membership fee model is most frequently cited by Indonesian nongovernmental organizations when asked about their solution to the problem of political financing. Not a single political party in Indonesia draws significant funds from membership fees, and this is unlikely to change. Second, the mechanism for donations is ineffective.

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