Saturday, December 01, 2007

Political Party Donors

Donations to the UK Labour Party are in the news again [Party funding row 'a sorry tale' - BBC News, December 4th 2007]. There are two related questions here, which Stafford Beer's POSIWID principle may help us answer.
  1. Why does anyone give money to a political party?
  2. Why does anyone care about the manner of the donation?
Doubtless some political donations are made in the hope of getting something in return. The UK still has a so-called honours system, where selected people can be given various awards, including peerages and knighthoods. People may also hope to be appointed to various statutory bodies and quangos, where they can exercise some influence and status. Sometimes the motive is more straightforward - perhaps a business wishes to lobby for a favourable decision. (Lots of political donations come from property developers, for some reason.)

From a moral point of view, all of these practices would count as corrupt. Some people find it hard to believe that anyone gives large sums of money to a political campaign without having some agenda of this kind. And public servants (including politicians, judges and policemen) are vulnerable to accusations of corruption if they accept these donations - and get found out.

As a (political) response to earlier incidents of sleaze in the UK, we now have laws that govern donations to political parties. It seems that some recent donations to the Labour party have broken these laws, while other donations have evaded these restrictions by being framed as "loans" rather than "gifts".

There is now an extraordinary public dispute going on between Labour Party officials and someone called David Abrahams, who donated large amounts of money anonymously (and therefore illegally) to the Labour Party. Like most people perhaps, I had never heard of Mr Abrahams until his attempts to maintain his anonymity back-fired. And like many other people, I started to wonder what his real motives were.

In the past, giving anonymously was an accepted way of ensuring that the recipient was not put under obligation. But under the new regulations, anonymity is now always suspect and often illegal. So things change.

By donating a few hundred thousand pounds to the Labour Party in a dodgy manner, Mr Abrahams may have delivered a greater benefit to the Conservative Party. Indeed, some Labour Party officials may be treating Mr Abrahams as if they believed this was the effect he intended all along. Abrahams himself has written an aggrieved article in the Independent on Sunday ("I accuse", Sunday December 2nd, 2007), putting the blame for this embarrassment on Labour Party fund-raisers.

Fund-raising is not an easy job, and it is perhaps understandable that some people with this responsibility steer close to the limits of what is ethical or legal, and are willing to be flexible in order to accommodate the whims of donors. After all, you probably wouldn't be doing the job if you didn't believe in the goals of the party, and the party obviously needs money to achieve these goals. And if you believe absolutely in the moral integrity of the Party Leaders, then surely there is no harm in allowing donors to pay large amounts of money for the privilege of meeting them, since the Party Leaders will never allow their principles to be compromised by vulgar financial influence. So it is easy to see how party functionaries might persuade themselves that the end justifies the means, and that there is no moral risk in bending the rules or exploiting any loopholes.

The rules may be supposed to protect the nation from corruption, but it's not easy to see whether they actually work. As a citizen with limited access to information, I don't really benefit much from knowing the donors' names or nationalities - what I really want to know is whether there is any link between party donation and, say, planning approval. Advocates of the current arrangements speak of the benefits of "transparency" - but transparency isn't worth much unless you can see the whole end-to-end system, from donation to influence. And links can't be proved from single cases, but require detailed data and statistical analysis.

Transparency alone (at least in its current form) cannot control corruption. Is it relevant here that the current arrangements were designed by politicians who had a strong stake in the continued possibility of political donation?

Because they have little power, at least in the mundane world, churches and charities have always been free to accept donations from the most vile people, and devote these donations to worthy causes. (Yet even this freedom is nowadays put under question, and charities are sometimes put under pressure to return donations from highly unpopular sources, lest they are themselves tainted by the same unpopularity.) But political parties can never be given this freedom.

There are several nested layers of analysis here, which Stafford Beer's POSIWID principle can help us with.
  • What is the purpose/effect of a single donation, and the manner in which it was given?
  • What is the (collective) purpose /effect of the totality of donations, and the manner in which they were given?
  • What is the purpose of the regulations governing political donation, and what are the (presumably unintended) side-effects of these regulations?
  • How do the systems of political donation and funding fit into the larger political system?

In general, there are major problems with looking for engineering solutions to social and political problems. Stafford Beer ran into some of these problems himself, in Chile and elsewhere. But regulation is itself a form of engineering; thus once we are on a regulatory path it makes sense to turn to the systems engineering tradition to discover why a particular regulation doesn't produce the required outcome, and how to design better regulations.


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