by Adriana Ramírez Flores

The autonomous institute commissioned of the organization of elections is the Electoral National Institute (INE for its abbreviation in Spanish). INE computes the amount of money to be distributed among the political parties according to the next formula:

total funds = $47.5 * (# of registered voters in INE)

Recently, the young -and independent- congressman Pedro Kumamoto proposed a modification of the formula to:

total funds = $47.5 * (# of participant voters in the previous election)

Which implies a difference of 47 million voters and potential savings of 2,300 million pesos, approximately USD 127 million just for the next electoral year; which is equivalent to 20% of annual resources[1] assigned to provide health to population in rural areas (12.3 million Mexicans are enrolled in this program)

 

Previous expense of political parties in elections

In Mexico, as in many countries, there is constant debate regarding how much money to assign political parties during their campaigns and daily operations. In Mexico, the total amount spent by political parties leads to frustration and anger as the population legitimately demands funds to alleviate poverty, and the provision of quality education, health and basic services.

In the Federal Code of Institutions and Election Procedures, written in 1996, is established the current legal framework that assigns the calculations of the money distributed to each political party. The Code considers assigning public funds in three categories:

  • Ordinary and Permanent Activities (AOP): the total amount to be distributed between political parties is distributed 30% equally among political parties with representation in the Congress, and 70% depending on the proportion of representation in the Congress.[2]
  • Campaign Expenses: on election years, an amount similar to AOP is given to each party.
  • Specific Activities: money for education and political training, as well as for TV and radio programs.

But political parties are allowed to receive funds from their supporters, activists, and financial returns, as long as they do not the amount given through public resources.

The current formula was established in 1996 with the purpose of elevating the funds given to political parties from USD 33 million in 1996 to USD 117.2 million in 1997; which is 3.5 times the funds provided the previous year. But if you compare the increment the increment from 1995 to 1998, both non-election years, the funds provided to political parties incremented almost 8 times.

 

Expense in political campaigns

Already in 2003, and only considering the biggest three political parties, the amount of money destined for political campaigns in media rises to USD 36.78 million[3] (PAN 11.7 USD millions, PRI USD 13.21 USD millions, PRD USD 11.87 millions).

That legal and reported expenses[4] for posterior elections only kept increasing, by 2006 and 2012 the allowed amount in political campaigns kept rising as agreed by the council of the Electoral National Institute. Only considering the presidential campaign, the allowed amount was USD 81 million in 2006 and USD 64 million.

Reasons to support modification to the formula of funds distributed to political parties

  • The proposed reform suggests that USD 127 million not spent on political parties, can be assigned to more productive and transparent expenses that create bigger benefit for the population.
    • To get a feeling, savings are equivalent to 20% of annual resources assigned to Public Program IMSS-PROSPERA, which provides health to population in rural areas.
  • If political parties reduce the amount received, they will reduce their capacity to buy votes through gifts to the population, decreasing pork-barrel politics. Which, gives more incentives for politicians to earn votes through good performance and not with merchandise.

Further reforms regarding funds spent by political parties

  • Effective and timely accountability: Even though there is accountability of financial resources of political parties, not all the resources are tracked, and the process can be done up to one year once the elections are past.
  • Set maximum limit of time every political party can have in each kind of media.
  • Establish a transparent procedure for private donations to the political parties.

 

 

References

  • Ugalde, Luis and Mario Guzmán. 2015. En las urnas: más dinero, más corrupción. Revista nexos.
  • Kumamoto, Pedro. 2016. Sin voto no hay dinero.
  • Centro de Estudios de las Finanzas Públicas. 2013. Proyecto de Presupuesto de Egresos de la Federación para el Ejercicio Fiscal de 2013, Instituto Mexicano del Seguro Social.
  • Aparicio, José. 2006. ¿Cómo se financian los partidos políticos en México? Centro de Investigación para la Docencia Económica.
  • Casar, Amparo. 2017. Cuesta mucho, rinde poco. Periódico Excelsior.
  • Ugalde, Luis. 2015. Democracia a precio alzado. Revista Nexos.
  • Animal político. 2013. ¿Cuánto costaron las elecciones de 2012?

[1] Own calculation considering Budget and enrolled population to IMSS-PROSPERA from official statistics provided by the Mexican Institute for Social Security (IMSS, for its abbreviation in Spanish)

[2] Money per partie = (.3 * (Total AOP/# of political parites)) + (.7 * Total AOP * (# votes received by the party/# of voters in the election))

[3] All calculations in this memo are own, based on MXN official statistics, and estimated considering currency rate at 18 MXN = 1 USD.

[4] Unreported donations, money deviated from programs and infrastructure, and other illegal sources can’t be considered.

 

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