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Financing Democracy in the Americas: A Conference Overview

After a quarter-century of democratic governance, many Latin Americans are questioning whether it serves their needs. The expected benefits from the structural adjustment policies that democratic governments pursued have been slow in coming, and working class citizens are losing patience with international financial institutions and their own governments.

Money conscious voters in troubled economies have begun to ask whether elections really allow them to hold governments accountable for enacting promised reforms, or whether instead politicians respond only to the special interest groups who fund their campaigns. Democracy remains a valued good, but questions are being asked about how much it costs, who pays, and whether the need to raise funds distorts policy agendas.

Underdevelopment makes public financing of parties and election campaigns difficult. Political parties whose constituents are too poor to pay membership fees must survive on the private fortunes of leading candidates, profits from businesses affiliated with the party, auxiliary support from civil society organizations run by party leaders, and donations from international foundations linking parties with shared ideologies. The temptation to dip into public coffers or accept illicit funds is ever present, and even legitimate contributions can come accompanied by expectations of future influence on policy or special access to government contracts. Campaign finance scandals have deeply damaged governments in the region, such as the Samper government in Colombia and the Mahuad government in Ecuador.

Questions about how best to finance democracy are echoed in North America. Facing escalating campaign costs in an increasingly sophisticated media environment, both Canada and the United States have made changes in their campaign finance legislation. In the Caribbean, traditionally stable party systems have suffered from corruption scandals and increasing concerns that drug money may flow into party coffers.

The Carter Center held the conference Financing Democracy in the Americas: Political Parties, Campaigns and Elections on March 17-19, 2003. The third in a series of major conferences sponsored in large part by The Coca-Cola Company, the Financing Democracy conference brought together top government officials, multinational organization representatives, business leaders, scholars, and civil society leaders from the Western Hemisphere to discuss how elections and parties can be financed in ways that will be correctly perceived as honest contributions to the public good.

As with The Carter Center's highly successful past conferences Transparency in the Americas and Challenges to Democracy in the Americas, the Financing Democracy conference will result in constructive, practical proposals for improvements that can be carried out by citizens, their governments and the international community of nation-states. Experts from the hemisphere will share information on the costs of maintaining informative campaigns, organized political parties and efficient electoral institutions.

Participants considered the role of the media in forcing up campaign costs, informing the electorate, and empowering candidates--for good or for ill--to reach out to voters absent traditional party building. We reviewed evolving campaign finance rules throughout the hemisphere, exploring the role for public finance in poor countries, and whether limits on campaign spending can be enforced. And we took a hard look at the decline of party systems and the opportunities such lacunae create for populist, "direct democracy" alternatives, such as the Chavez government in Venezuela.

Based on their discussions, participants suggested action items for governments, civil society, and the international system. Members of the Carter Center's Council of Presidents and Prime Ministers of the Americas summarized these recommendations in a brief public statement. Carter Center staff then will assist the Council in disseminating these ideas through engagement with regional summitry, government advising, transnational networking with civil society organizations, and pilot projects where they are needed for developing new and promising policy tools.

The Carter Center expects this conference to shape international discussion about what should be done to confront the crisis of confidence that the region's democracies face, and to result in policy recommendations that will influence decision-makers. Past Carter Center conferences have included keynote speakers such as Venezuelan President Hugo Chavez, former Secretary of the Treasury Robert Rubin, and World Bank President Jim Wolfensohn. The Transparency conference resulted in a project to support the development of anti-corruption and access to information laws in Jamaica, both of which have been enacted, as well as the establishment of the Council for Ethical Business Practices group of leading corporate ethics officers in Atlanta. The Challenges to Democracy conference helped set the agenda for the 2001 Summit of the Americas in Quebec, Canada, where some of its key recommendations were adopted by heads of state.

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