Party Financing in Post-Soeharto Indonesia: Between State Subsidies and Political Corruption

By Mietzner, Marcus | Contemporary Southeast Asia, August 2007 | Go to article overview

Party Financing in Post-Soeharto Indonesia: Between State Subsidies and Political Corruption


Mietzner, Marcus, Contemporary Southeast Asia


Ever since the reintroduction of democratic rule in 1998, Indonesia's political parties have been the target of harsh criticism by the media, academic observers and the electorate. In opinion surveys, voters have invariably ranked parties among the most corrupt institutions in the country, and a large number of corruption cases brought against party politicians both confirm and reinforce this trend. "Money politics" has become a household phrase in Indonesia to depict the moral decadence of party politicians, describing their dual practice of accepting bribes from patrons and distributing money to gain or maintain office. Echoing these popular sentiments, domestic and foreign observers have described the parties as rent-seeking entities, driven by oligarchic interests and personal greed. With their legitimacy in decline, parties are generally seen as the weak link in Indonesia's consolidating democracy. This perception, in turn, has fuelled demands for non-party figures to play a greater role in political life.

There have been few attempts, however, to critically explore the motivations behind the political corruption of political parties. In general, two different approaches have been used to analyse the problem. To begin with, proponents of the neo-Marxist paradigm have argued that political parties and their leaders are agents of global and local capitalist interests, with the "predatory" behaviour of Indonesia's parties reflecting developments in other parts of the world (Robison and Hadiz 2004). In this model, parties are corrupt because they are by definition part of the struggle of oligarchic elites to hijack democratic institutions and perpetuate the capitalist system. The other interpretation uses a more anthropological approach, and is based on what Jonathan Hopkin (2004, p. 629) has called the "assumption of self-interested utility": politicians are, like all other human beings, largely interested in maximizing their own benefit, with political parties only constituting vehicles for increasing their wealth, influence and social status. The latter interpretation has been the most popular one in Indonesia, where a certain measure of corruption is often viewed as an integral feature of human nature.

This focus on either neo-Marxist or anthropological imperatives has distracted observers from looking at the problem of party corruption in Indonesia as an analytical issue with highly complex implications for the country's political system. Most significantly, there have been very few detailed analyses of the critical roles that state subsidies and illicit fund-raising play in Indonesia's party financing mechanism. In particular, the causal relationship between the low level of state funding for parties and the increase in their corrupt practices has not been sufficiently researched. Similarly, while there are numerous reports of corrupt politicians and their rent-seeking activities (Johnson Tan 2006; Choi 2004), very little has been said about the high costs of holding and maintaining political office in Indonesia. As a result, other reasons for political corruption beyond oligarchic agency or individual greed have not found their way into the literature on Indonesian political parties and their crisis of legitimacy.

Addressing this gap in the existing literature, the following study discusses financing and expenditure patterns of political parties in Indonesia. It begins with an overview of the various income sources of parties, showing that legal and direct state subsidies were reduced dramatically in recent years--and that parties compensated for this decline in revenue by corrupting even more public monies than was already the case before the cut. The article will then analyse the expenditures made by political parties and their functionaries in gaining and defending public office, demonstrating that the decline in state subsidies was accompanied by exponentially growing costs. In concluding, the discussion weighs the benefits and disadvantages of public party financing. …

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