Transcipt: All about Money

The Centre for Elections, Democracy, Accountability and Representation (CEDAR)

00:00:01 Petra Alderman

Welcome to the 'People Power Politics' podcast, brought to you by CEDAR, the Centre for Elections, Democracy, Accountability and Representation at the University of Birmingham.

00:00:15 Petra Alderman

Hi again. My name is Petra Alderman and I am a research fellow at CEDAR. It is my great pleasure to be your host for another podcast episode of the 'People Power Politics' podcast.

00:00:26 Petra Alderman

Our guest today is William Horncastle. Will is a Senior Lecturer in Criminology at the University of Bedfordshire and a former PhD student at the University of Birmingham. He researches in the areas of political finance regulations and electoral campaigning, and this is what we are going to talk about today.

00:00:45 Petra Alderman

Now, before we launch into the conversation, let me just welcome you to the 'People Power Politics' podcast. Will, it's great having you here.

00:00:53 Will Horncastle

Thanks. Nice to be here as well. Thank you for having me.

00:00:56 Petra Alderman

Will, 2024 is often dubbed as the super election year because, you know, almost half of the world's population would have gone to the ballot box by the end of this year. And we've already had polls in countries like Bangladesh, Indonesia, and now we're having polls in India. And of course, there is the UK and the US elections that will take place presumably by the end of this year. Now I think pretty much in every kind of country and context, money in sort of electoral campaigns can play a significant role. So I'm going to use the opportunity that you've been doing extensive research about this in the past few years and just let me ask you this question generally. You know, talking about elections, how important is actually money to campaigning?

00:01:45 Will Horncastle

Yeah, I mean it's, it's a really interesting question to ask and one that I don't think is particularly spoken about now. It is important for many reasons. Campaigns are obviously really expensive and these things range between countries as well. So you look at a country of, say, the UK versus a country the size of the US the, the costs are gonna be massively different because of geographical reasons.

00:02:12 Will Horncastle

So generally money is spent on things like TV adverts, Facebook ads, and actually sort of professional staff of parties as well. So there's many reasons that fundraising, in particular is an important aspect of elections.

00:02:28 Petra Alderman

Fantastic. Yeah. It it's good you sort of brought a little bit more context into the money cause I think sometimes we can imagine electoral campaigning being really about the door to door canvassing or maybe using social media as well.

00:02:41 Petra Alderman

In many cases you could imagine using social media for free, and I think in some countries during recent elections there has been a lot of talk about how maybe social media is actually changing the nature of the political campaigns. I mean, can you see something like that translating into how the money is being used, all these new technologies, new modes of campaigning has it had any kind of effects on how the money is used or what it is used for.

00:03:09 Will Horncastle

Yeah, that’s again, an interesting point we can see from like the literature on campaigning and party organisations that the role of volunteers in parties has shifted quite a lot over the years. Parties are now relying a lot more on these sort of professionalised organisations and part of this is you know, spending hundreds of thousands or whatever on these sort of professionalised online campaigning companies and you know, a lot of people get their news and their day-to-day sort of information off of things like Facebook. And I nearly said Twitter then, but X now, yeah. So there is definitely shifts towards these digital campaigns and I think spending trends have reflected that.

00:03:52 Petra Alderman

Well, when we talk about maybe source of some of these findings, I appreciate that. That probably differs from country to country to a certain extent. But is there a kind of a general rule of thumb in terms of where all this money comes from, doing parties tend to rely more on, let's say, trying to fundraise from their supporters? Or are they maybe becoming increasingly more reliant on sort of big banks or owners, or somebody who can inject quite a lot of cash into your campaign so you don't have to go around and try and and and get money from lots of individuals because that money is small but somebody can come in and inject a large sum maybe once or twice during the course of the campaign, and that can help you, you know, stay afloat.

00:04:37 Will Horncastle

Yeah, it kind of varies from party to party and between countries and a lot of this is shaped really by what the laws allow. So I suppose if I was a party or fundraiser for a party, it would be much easier to go to one person and say look, give me £100,000. Then it would to go to 100,000 people and say give me £1 each right? So the sort of easy option right is to go to these big donors and I think that's what a lot of parties do. They tend to rely on these key individuals and businesses and in some cases trade unions as well. But there's also additional trends, more comparatively, let's say, in Europe, a lot of parties get quite substantial public funding and this has kind of grown out of the lack of kind of voluntary basis and the need to bend more on things. Parties have turned towards getting those publicly guaranteed sources of funds from from the state.

00:05:40 Petra Alderman

Now you mentioned that obviously the sources of funding depend to a large extent on the kind of regulative environment or the legal environment in the different countries. And I know that you've been doing some research or using the UK and the US to look at maybe perhaps a little bit closer in terms of your case studies for this particular research, so if you were to compare the legal and regulatory environment in the UK and the US, is there much difference when it comes to campaign finance and how does it actually shape the electoral or the nature of the electoral contests that we can see in those two countries?

00:06:19 Will Horncastle

So the difference between the US and the UK is actually substantially different. In the UK, we have limits on outgoing parties, so they'll have a spending limit based on the number of constituencies that they're running candidates in. In the US, there's the kind of opposite where there's no real upper limit on what can be spent. In the UK, we have no limits on the amount that someone can donate to a party either, so I could theoretically go and give, you know, the Labour Party or Conservatives £1,000,000 if I had it, whereas in the US there are some limits on that, although as I'll probably go on to in more detail later, there's quite substantial loopholes and ways that money makes its way into the US process. I actually saw this, quite interestingly, I was in the US couple of years ago and there was some sort of local election going on or State election. Not sure what it was. And I was watching TV and it was just constant political ads of trashing the opposition candidate. In the UK, we have explicit bans on spending on TV adverts, so those sorts of little nuances in the rules have pretty major impact on the tone and kind of methods of campaigning too.

00:07:42 Petra Alderman

So would you be perhaps fair to say that when you compare the UK to the US environment that in the US maybe the campaign gets more intense because there are those well, there are no limits on what you can spend it on. So every party is literally probably been incentivized to try and fundraise as much money as possible and then plays as many adverts and put out as many billboards. And, you know, do as much. So people get bombarded with political messages pretty much non-stop, well, based on what you say, that seems to be the case. Would that be a fair representation of the effects that it has in the US case?

00:08:22 Will Horncastle

Yeah, I think that is that's definitely fair. Another thing that influences this as well is the wider regulations just beyond the political financing specifically. So in the US, you'll find that because they have very strict set election years and election periods, there is a time where the campaigning ramps up through the year and through this cycle there's a real clear cycle in fundraising and campaigning. In the UK, we're a bit more unpredictable. We know there's probably going to be an election this year but don't really know when it's gonna be so it's much harder for the parties themselves and the campaigners to actually ramp things up and predict when their messages are going to get across in the best way. So the US is very much a constant kind of cycle of boom and bust in the way of spending and and campaigning.

00:09:15 Petra Alderman

Yeah, it's fascinating and I think we can see it already now whereas if you watch news regularly. You can see that there's obviously a lot of activity already in the US in terms of the campaign, so it seems to be a lot of the campaigning and fundraising is already on the way, whereas in the UK there is obviously talk about that, but the mobilisation doesn't necessarily seem to be be there. So it doesn't seem like the UK parties are sort of in that full on campaigning mode here just yelling as you said, that's probably with nobody actually being sure when the election is going to happen yet.

00:09:50 Petra Alderman

OK. So when we think about and perhaps maybe let's stay a little bit with the US and the UK for now. We said that obviously the fact that the US does not have any kind of regulation or major regulation on the campaign financing, but the campaigns can be a lot more intense and there is obviously a lot more money in circulation during and in the run up to the polls.

00:10:16 Petra Alderman

Now, does that have any discernible effect? You know, could we just say, and this is maybe a little bit more generally speaking, but could we just say that the candidates who tend to spend more money will be likely to win seats or that they're kind of guaranteed to almost like buy their way into power and in the UK? Is there some kind of link as well between how much money you spend on your campaign and your chances of actually getting elected?

00:10:45 Will Horncastle

So generally speaking, that kind of link does seem to exist, oftentimes you'll find that the highest spender is the one that wins, but this is not always the case, but I think it's worth noting that actually this kind of correlation doesn't equal causation. So what you'll find is actually those that spend the most money are often able to spend the most money because they're the better candidate in the first place, so they're able to fundraise more effectively. Me as a donor, I'm more likely to give money to a good candidate versus a bad candidate so they can naturally have those inequalities there. Now, one kind of analogy, I suppose that I actually borrowed from Tim Haughton, one of your colleagues, is around how campaign spending is almost like a Formula One race or just like a motor race where it's not about who has the most fuel that wins. It's about the most talented driver or sportsperson in the race. However, you can have all the talent in the world but if you don't have enough fuel to get yourself over the line then you're just not gonna win.

00:11:53 Will Horncastle

So all else equal, when resources are balanced out, generally the better candidate should win in theory. And actually there's quite a key example of this in the last election cycle in the US, Michael Bloomberg, the former New York Mayor who tried to enter the Democratic primaries and he spent over a billion dollars of his own money on a campaign that lasted 3 months, and he just dropped out. He couldn't get the support because fundraising is a sign of good support also.

00:12:24 Petra Alderman

That's fascinating. So even if you are, and I think we've seen this, probably across the board, not just in, in the US where you have people who enter the political races from the world of business and have a lot of their own money behind them. And in many ways you can feel or you could think like, well, you know, they have all sorts of sources of money themselves. So they probably don't need to fundraise. But based on what you're saying, it would seem that fundraising in itself is almost like a source of validation external validation that this candidate is actually quality or has enough qualities for other people to back him or her up, right? So it's not just the the money, but also that recognition that comes with the ability to secure all that funding. How is it in the UK? Is it quite similar in terms of parties that tend to spend more money, more likely to win or is the link there a little bit fuzzier?

00:13:18 Will Horncastle

It's a little bit different from our perspective from the UK because of the spending limits. So what you'll find is you know they're up to that spending limit and then they can't really go any higher than that, so the I suppose inequalities between certainly the two main parties, you know, Conservatives and Labour, are not so important. But I suppose with regards to the smaller parties, there is a probably an influence there as well.

00:13:45 Petra Alderman

When we think maybe about the two major parties in the UK and you mentioned before that there is this spending limit, but if you were let's say business only that there is not a particular cap on how much you can donate to the party is that in general, is that specifically linked to the campaign electoral campaign period and then you know how this is actually affect the parties, because I think there's been a growing maybe concern, not just in the UK but also elsewhere that when you have these big business donors that support parties and sometimes these big donors might not even come from that country, so I think you've got these foreign donors that might come and support these political parties in some kind of way via our businesses and transactions like that that you know, how much influence did these donors actually then wield over the parties and what kind of effect does it have, perhaps on not just how these parties campaign, but maybe what they campaign on?

00:14:47 Will Horncastle

It's quite difficult to say really with regards to kind of that later point of the question around how it impacts what they campaign on but there's certainly evidence to suggest or, you know, allegations, at least that there has been foreign influence in particularly the Brexit campaign. A few, well, actually quite, quite a few years ago now, but it is technically illegal for foreign money to come in to the parties, but there are ways that it has been shown that you know ways around that, it's very funnelling it through UK companies or individuals, but yeah, there's evidence of potential, you know, Russian interference in Trump's campaign as well and and things like that from 2016. So, you know it's not just an issue of the UK with potential foreign interference, but quite a routinely discussed topic around the world, I think.

00:15:45 Petra Alderman

I remember not long ago I was reading a little bit into the rise of Donald Trump in the US and you know, all the different factors that perhaps helped to explain it. One of the things that was quite interesting and might be relevant to this conversation was that because of the relatively regulation free environment in terms of party campaign that you know, you could have businesses or maybe more conservative, I mean in the US case, organisations that will funnel more money into parties to back particular candidates who are maybe more conservative themselves or more in line with the kind of conservative policy, or even sometimes it can be in the line of economic policy, so maybe they are for less regulated market, so they they back and support particular candidates so that that candidate has more chances to win. So what do you think does this do perhaps you know, in terms of effect, I mean, could that perhaps be leading to the more general trend where we seeing more and more fringe candidates, you know, being able to amass quite a lot of support and then leading and often even winning these electoral contests? And what kind of effect does this have on democracy and maybe how responsive politics is towards the needs of the people?

00:17:10 Will Horncastle

Again that's a really interesting point, particularly in the US context. I suppose the best way to answer this in terms of how we sort of got here in a way with these, I suppose ideological fringe groups, extreme groups, there's a kind of general legislative path that has contributed to the rise of these these groups, many of them, are called what they term super PACs, the result of a few big Supreme Court rulings in the US that have essentially developed groups that are not parties themselves but are alongside parties because the Constitution says, you know, if you're these independent groups, we can't limit your activities in the same way we can limit parties. So essentially, the US Constitution and the Supreme Court ruled that money in terms of political spending is actually a form of speech. So it's unconstitutional to regulate political spending because you are violating the First Amendment, which is about free speech.

00:18:20 Will Horncastle

So essentially, these big business organisations are able to spend what they want independently, "independently" in quote marks of the candidates and parties. But there's fairly, you know, routine evidence that there is coordination between these groups and the candidates themselves. So I mean one interesting example, but it's slightly off topic from your question, but I think it adds some important context is that it's actually still illegal. It's been illegal since the early 1900s for corporations to directly donate to US political parties, but it's not illegal for them to make donations to these groups that sit alongside the parties that are being sort of termed as shadow political parties.

00:19:10 Will Horncastle

They have their own offices and they're kind of parties in all but name, right? So it allows these single issue sort of organisations and organisations that back their single candidate to rise to the fore and I think personally it's kind of contributed to the mass polarisation that we've got in the current time.

00:19:31 Petra Alderman

And these sort of shadow organisations or shadow political parties, once they have the money, how would they use them? Would they use them in a sort of similar way as a party would? So would they help organise or fund rallies for these, maybe for their preferred candidates in certain constituencies, states, areas, or will they invest into perhaps, I don't know, TV advertising or even social media campaigns like how would they use these funds to support the candidates?

00:20:03 Will Horncastle

It's primarily the kind of TV ads and that sort of stuff, the actual running campaigns on their behalf, which is the key part of that, is the on their behalf, they're not allowed to actually coordinate, as I said earlier, with the individuals themselves. But you know, it's a very grey area that I think gets exploited quite a lot now.

00:20:24 Petra Alderman

Fascinating. Now when we talk about overall effects of you know, money and campaign finance on democracy. We've already touched on the fact that probably we could see the rising polarisation, you know, being partly driven by organisations with their own interests, maybe businesses with their own interests funding these political parties. But are there any other effects on democracy that you can discern or you've been able to discern throughout your research and study?

00:21:01 Will Horncastle

Yeah, it kind of goes to the fundamental cause of what democracy is and what it should be, right? So elections theoretically, and I suppose, conceptually speaking, should be a marketplace of ideas where people you know campaign on things that they're interested in and then at the end, everyone has one vote and you know in simple terms, the person with the most votes win. Now where this gets muddied is with campaign spending. Because on the one hand you can say, OK, everyone has an equal right to spend what they want on campaigning. But in reality that doesn't really work because what you're doing is you're just amplifying economic disparities, right? And inequalities in wealth which we know are massive and unfortunately always rising, right?

00:21:56 Will Horncastle

So democratically unregulated political finance goes against, from my perspective at least, the idea of one person, one vote. Everyone has equal rights and equal rights to influence the government, in my opinion at least.

00:22:11 Petra Alderman

Now we're nearing the end of this episode, so let me just ask you one more question. Over the past few years, we have seen maybe the rise of a certain type of politicians. So these politicians maybe unlike Trump does not come from big money, they're more kind of ordinary politicians. And I'm I'm thinking of that kind of profile of, let's say, AOC in the US and the story and the narrative that gets built around these people, especially during the political contests and campaigns, is that, you know, these people come from background with very little money so they cannot actually spend and it's about them doing the kind of more traditional canvassing, more traditional door to door knocking, talking to people rather than just pushing lots of money and resources into these campaigns but based on what?

00:23:04 Petra Alderman

We've been talking about it's kind of difficult maybe to imagine that these people would be running completely without some kind of backing and I know you talked about fundraising, but again, as we talked about, it's a different story. If you are fundraising from individuals, they can only maybe provide as much money. I don't know, few 100 bucks at most. So you have to then actually get that money from a very large section of the population to have that kind of amount of money that maybe you're established or incumbent candidate has. So is there something that we're not seeing or how, how does that work? Is it even possible for people with very little money to enter politics in this day and age?

00:23:44 Will Horncastle

Again, it's it's really difficult to see how, particularly in the US, but you know system now I I don't know anything about the personal finances of representatives. But one thing that I will say is that it's becoming more and more expensive to run, particularly in the US and it's tempting to say a lot of this is down to inflation, but actually the figures show even in adjusted for inflation, that it's still been rising.

00:24:15 Will Horncastle

So the effects of this in terms of representation are that you have to sort of almost be a millionaire or it's gonna come to the point where you have to be super, super wealthy to actually be in with a shot of running in the first place. Now there are obviously some examples, AOC and people who are probably quite good fundraisers but again, the fundraising and the being a good candidate tie as I was talking about earlier, kind of comes back into it. Having money in itself does not make you win, but being a good fundraiser may have. There may be some transferable skills there to be a good legislator and representative.

00:25:00 Petra Alderman

Fantastic. Well, I'm afraid that this is probably all we have time for today, but thank you so much for sharing your thoughts and your research with us on this very fascinating topic of political finance and, you know, electoral campaigning and how both of them really affect the state of democracy so thank you both for joining the ‘People Power Politics’ podcast and for talking to us about these fascinating developments.

00:25:29 Will Horncastle

Thank you. It's a pleasure. And I look forward to seeing how the US election goes this year.

00:25:35 Petra Alderman

I think we all are. On that note.

00:25:38 Will Horncastle

Fascinating.

00:25:40 Petra Alderman

Indeed. I am Petra Alderman, senior research fellow at CEDAR and the host of this 'People Power Politics' podcast episode. I have been talking to William Horncastle, senior lecturer in criminology at the University of Bedfordshire. Thank you for listening to the 'People Power Politics' podcast brought to you by CEDAR, the Centre for Elections Democracy Accountability and Representation at the University of Birmingham. To learn more about our centre and the exciting work we do on these issues around the world, please follow us on Twitter at @CEDAR_bham and visit our website using the link in the podcast description.