Amid the frequent calls for reform of the legal framework governing elections and political parties, there is one idea that has been somewhat overlooked: increasing state financial assistance for political parties (Banpol). This proposal is quite controversial: it is rejected by the public but supported by anti-corruption and democracy advocates.
In a Kompas Research and Development study (May 29), for example, more than 60 percent of respondents rejected Banpol. The reasons vary, ranging from a lack of financial transparency to rampant political corruption by party cadres. On the other hand, the poor performance of political parties further legitimizes this public view. Meanwhile, many parties are pushing for an increase in Banpol. BRIN and the KPK, for example, have long included the agenda of increasing Banpol in the National Strategy for Corruption Prevention (Stranas-PK) to reduce political corruption. This article aims to highlight the grim reality of political funding and why Banpol is crucial as a solution.
The Reality of Political Financing
Political parties in many democratic countries face significant challenges in meeting their financial needs amid skyrocketing political costs. There are two underlying factors. First, political costs have skyrocketed since the rise of political professionalization through television advertisements, political consulting, and voter preference surveys (Webb & White 2007; Ufen 2008). Second, Whiteley (2011) notes that the decline of mass parties has left them unable to raise funds from members, due to a decrease in membership numbers and voluntary contributions.
These two issues are also experienced by developing democracies such as Indonesia. Mietzner (2009) and Ufen (2010) note that following the success of political consulting and surveys in Indonesia after the 2004 elections, parties began relying on political professionalization to win electoral competitions. At the same time, political battles have become little more than a contest of political marketing rather than a contest of ideas. This is marked by massive political advertisements focusing on the personal images of party elites, thereby increasing political costs.
On the other hand, Indonesia’s party tradition rarely features mass-based parties. According to Feith (1957), the majority of parties emerged not from grassroots movements, but from elite and intellectual organizations. This pattern continued after the Reformasi, when many parties were founded by charismatic politicians or businesspeople who used parties as personal political vehicles, adopting a catch-all approach.
As a result, Indonesian parties are viewed as distributors of wealth, not aggregators of public aspirations. Public expectations of parties and politicians are limited to how they resolve society’s short-term problems (Aspinall 2013; Mietzner 2015). Ultimately, parties become entangled in widespread political money practices. Political financing has ballooned, not only to facilitate the buying and selling of votes, but also to maintain the patronage networks that distribute these clientelistic exchanges.
Dysfunction in the Political Financing System
Legally, political parties have other sources of funding, such as membership dues and third-party contributions. However, poor financial management has made these two funding sources lack transparency. The majority of parties do not even include strict provisions regarding membership dues or third-party contributions in their Articles of Association.
On the other hand, the amount of state funding for political parties is still far from adequate. Government Regulation No. 1 of 2018 sets the amount of state funding for the national-level party headquarters (DPP) at Rp 1,000 per valid vote in the House of Representatives (DPR) election. Meanwhile, provincial-level party branches (DPW) receive Rp 1,200 per valid vote in the Provincial Legislative Council (DPRD) election. District/city-level party branches (DPD) receive the largest allocation, namely Rp 1,500 per valid vote in the District/City Legislative Council (DPRD) election. No empirical studies have yet been found on whether the amount of Banpol funds in GR 1/2018 is sufficient to meet the parties’ needs. However, a recent study by Supriyanto and Wulandari (2011) indicates that Banpol funds contribute less than 2% of the parties’ total needs.
Marcus Mietzner (2015) refers to this situation as “dysfunction by design,” namely the lack of state support and the absence of incentives for legal donations. As a result, parties rely on funding from oligarchs, which is often illegal. This is evident in findings by the Financial Transaction Reports and Analysis Center (PPATK) ahead of the 2024 elections, which recorded a surge in transactions of up to 4,000 percent in the accounts of party treasurers outside of official campaign fund accounts (RKDK). Suspicious transactions were also found in the accounts of legislative candidates linked to illegal businesses (Kompas, 2024). Unfortunately, the PPATK’s findings at the time were not further investigated by either the KPU or Bawaslu.
On the other hand, funds from corruption are also suspected of flowing to finance several political parties. For example, Rp 850 million from the corruption case involving Agriculture Minister SY Limpo during the Jokowi era is suspected of flowing to his party, Nasdem, to finance candidate recruitment events (Tempo, 2024). Meanwhile, in a Tempo report (2024), the ICW noted that 61 regional heads during the 2021–2023 period were implicated in corruption cases involving the buying and selling of positions within local governments, allegedly to recoup the costs of their regional election campaigns.
Changing Perspectives and Improving Political Parties
We certainly need to rethink at least two questions: what is the function of a political party, and who owns it? Neumann’s classic study (1956) explains that political parties serve to articulate public interests and bridge social forces with the state. Therefore, political parties should be viewed as aggregators of public interests. However, parties are often viewed as private property, whether belonging to business elites or charismatic political figures. This perspective ultimately traps parties within the private funding sources or personal networks of their owners, leading to the oligarchization of party leadership and funding sources (Winters 2013). Consequently, parties become unresponsive to public aspirations.
This perspective needs to be changed by placing the party under public ownership, not that of specific figures. Society and the party have a reciprocal relationship: the people hold sovereignty over the party, and the party is responsive to public aspirations.
In this context, strengthening the Political Party Fund (Banpol) is a strategic step. Falguera et al. (2014) identified three main objectives of Banpol: promoting party transparency and accountability to the public, ensuring equal financial access among political actors, and limiting the dominance of competitors with unlimited funding sources. Furthermore, Van Biezen (2004) and Gauja (2022) emphasize that Banpol provides public legitimacy to political parties, positioning them as a public asset. Consequently, Banpol serves as a state instrument to protect the public interest regarding political parties.
Increasing Banpol funding will create an equilibrium in the party-state-public relationship. Parties are accountable to the state through the institutionalization of bodies, including increased transparency, in line with incentives for increased Banpol funding. Meanwhile, institutionalized and transparent parties provide incentives to the public by acting as aggregators of public interests to the fullest extent. This can be achieved because parties can minimize their dependence on oligarchs and business elites if Banpol funding can cover at least 60 percent of their financial needs.
Consequently, various studies of the literature and practices in many democratic countries show that political party funding can reduce parties’ dependence on funding from oligarchs and, consequently, reduce political corruption. If political party funding is increased, adequate funding provides incentives for parties to carry out cadre development and political education, rather than merely serving as short-term electoral tools that rely on specific charismatic figures. []
KAHFI ADLAN HAFIZ
Researcher at the Association for Elections and Democracy (Perludem)