The cost of democracy

by Hartosh Singh Bal

Time Magazine declared it the year of the protester, clubbing together what was happening in regions as different as the Arab world, the US and India. While it is easy to find commonalities among the young, urban and largely middle-class protesters who came out on the streets, in some cases they were protesting against the tyranny of their governments and asking for democracy, in other cases they were protesting the shape democracy had come to acquire in their countries. The occupy Wall Street movement and the India against Corruption movement both represent similar sentiments. In the US the anger was directed against the influence of corporate on the democratic system largely through electoral funding, in India it was against corruption with the understanding that the source of high corruption was the cycle that went from the spending of vast sums of money (often illegally) for the elections to raising money when in power (often illegally) for the next elections.

As the countries making their way to democracy will find out in their own time, the funding of elections and its influence on the polity is the most problematic aspects of democracy. While much is made of local factors in estimating the cost of elections, much of the spending in elections is actually independent of such factors. Equalizing for the population size of each constituency and the difference in living standards gives a fair estimate across countries and time periods for election spending, especially in countries unconstrained by effective legislation on campaign spending, such as the US or India.

In the 2010 elections the average spending of the winning candidate for the US House of Representatives was $ 1.4 million. Factor in the ratio of the US population over 435 House seats as opposed to the Indian population spread over 543 Lok Sabha seats, allow for the GDP in terms of purchasing power parity and you arrive at a ballpark figure of average spending of Rs 1.3 crore (about $ 250,000) per Lok Sabha  by winning candidates.  Even though figures for Indian elections are difficult to calculate this is certainly the right order of magnitude for the expenditure in the 2009 elections. As a check one can use the base figure of spending in the 2000 US House election, adjust for population growth, inflation and increase in GDP (PPP) to arrive at a surprisingly accurate figure for the spending in 2010. This holds true for Indian elections as well if comparisons are made between 2004 and 2009. While the exactitude of such an estimate can be disputed on many grounds, I believe it captures the essential fact that much of the spending in an election can actually be accounted for in terms of population and living standards of a country.

The implications are especially problematic for large countries and when size goes hand in hand with a fast growing economy and a rising population as in India, they are doubly so. Two simple predictions follow from such a simplified model, one that election spending will always grow faster than the economy even factoring in inflation (over a period of time even slow population growth is a powerful factor), and the second that India by 2018 should be close to matching the US in election spending per constituency by a winning candidate.    

For a country such as India there seems to be no easy way out of this dilemma. The figure of 543 legislators to represent the entire country might seem low, but 500 to 600 is about the maximum manageable number in a legislature (only the EU has a Parliament where the maximum is set at 750 but then it has not been the best example of effective governance so far). Already a single Indian member of Parliament represent upwards of a million voters, which is perhaps three times as large as the electorate of a single seat in any other lower house of Parliament. The consequent distancing of the legislator from the electorate is a cause of considerable anguish in India, but to be in direct touch with a million voters is impossible.

The problem of rising expenditure brings about an additional element to this problem. In India much of the corruption in the system is a direct result of money being routed by bureaucrats to a minister to bolster party funds, but as the requirements have grown it has become necessary to source money directly from corporates. This is a given, there can be no other source for the large sums of money involved. The scandal that was most responsible for the anger that resulted in the anti-corruption movement in India involved the intervention of well known corporates in the process of the selection of ministers for the Central government.

Most western democracies have adapted by more or less legalizing what is essentially corporate corruption. Direct or indirect funding of candidates and parties is the norm and such funding has a crucial role in the legislative process when laws related to the interests of these corporate are discussed. Western democracies have weeded out the presence of day to day corruption by confining the problem to the rarefied levels of power where it is not visible but continues to influence public life.  

Essentially as growth continues in India, this seems to be the only available response. Too often, it is argued that corporate corruption is result of democracy gone astray, of corporates taking over our lives. Reasons are sought in the individual choices that politicians make, or the general decay of a society but really the problem the protesters in the US and India were railing against is not a result of processes gone astray but is a structural problem that results from being a large democracy.