Elections are the foundation of any democracy as they allow citizens to actively engage in the democratic process of choosing their government representatives from competing representatives of political parties and ideologies. In 2017, Nepal successfully conducted the first set of elections under the new political system and moved towards strengthening and consolidating democracy in the country. The elections for the three levels of government, namely the local, provincial and federal elections were held under the new federal system. Local election, which was conducted after more than 20 years, was held in three phases for governments in the urban and rural municipalities. The legislative elections were held for the federal government and seven provincial assemblies. There is a rising concern on the high election expenditure incurred by candidates and their supporters and the Government during the elections. The high cost of the election is not only an opportunity cost for a developing country like Nepal and but also calls into question the integrity of the electoral democracy. Election Observation Committee Nepal (EOC-Nepal) conducted a nine-month long study on the campaign finance for the aforementioned elections. The objective of this study is to estimate the amount of money spent during the election by the different actors, including candidates and their supporters, the political parties, and the Government to estimate the total election expense incurred by the nation in 2017 and to assess the regulatory framework governing election campaign finance in Nepal.
The study was conducted in two phases. In the first phase, a mixed methods study was conducted in four districts1 for the local elections. For this study, 216 candidates from urban and rural municipalities, and members of the civil society were interviewed. Individual case study method was adopted to estimate the cost incurred in the local elections. A total of 24 case studies were prepared. Information collected from formal and informal group meetings and individual consultations are used to fine tune the information generated through the case studies to estimate the total expenditures incurred by the candidates. Secondary data, including audited financial reports and data published by the Election Commission, was used also to determine the expenditure incurred by the Government and political parties.
In the second phase, a mixed methods study was conducted in 31 districts2 for the study of the provincial and federal elections. For this study, 189 candidates were interviewed to estimate the cost incurred by the candidates for provincial and federal elections. The information collected from the interviews is adjusted with the information received from the area-specific individual and group meetings with the civil society members. Data published by the Election Commission was also used to determine the Government expenditure for the elections.
Major findings
Money played a significant role in the elections in 2017. The data shows that candidates spent more money on the elections than political parties, and the Government combined.
i) Local elections: It is estimated that Rs. 6,942 Crores was spent on the elections. Candidates and their supporters spent Rs. 5096 Crores while the Government spent Rs. 1,846 Crores. The average cost per voter stands Rs.4,923.
ii) Provincial and Federal elections: It is estimated that Rs. 6,221 Crores was spent on these elections. Candidates and their supporters spent Rs. 4,595 Crores while the Government spent a lump sum of Rs. 1,626 Crores. Candidates and their supporter spent Rs. 2,632 Crores for the provincial election and Rs. 1,963 Crores for the federal election. The cost per voter for these elections stands at Rs. 4,040.
iii) Total expenditure: It is estimated that a total of Rs. 13,163 Crores was spent on the three levels of elections. Candidates and their supporters spent Rs. 9,691 Crores while the Government spent Rs. 3,472 Crores.
The high spending on elections has a negative influence on the electoral integrity in Nepal. The study shows that electoral integrity is called into question because of unequal access to funds among candidates, the high influence of financers, lack of transparency of financial accounts and lack of accountability in the election cycle. Further, it was noted that the probability of getting elected increases with an increase in campaign expenditure. The data shows that the
candidates that spent more money on the election were more likely to win the election. The average expenditure made by the winning candidates in the federal election is higher (Rs.2.13 Crores) than the average expenditure made by the runner-up candidate (Rs. 1.49 Crores) in the federal elections. This trend can facilitate elite capture of election results and access to political decisions.
The Election Commission has election codes of conduct to ensure electoral integrity; however, the election codes of conduct were not effectively enforced. Although, the election codes of conduct regulate spending by candidates, the study shows that most candidates spend well beyond the government ceiling. The silence period, which restricts canvassing 48 hours prior to the election date, was violated by the majority of the candidates. A stronger mechanism
for the regulatory environment will have positive impact on the electoral integrity in Nepal. Major findings: Study on the Election Campaign Finance of Local, Provincial, and Federal Elections in Nepal, 2017
Recommendations
The regulation of elections falls primarily within the jurisdiction of the Election Commission; however, other stakeholders, namely the Government, political parties, the private sector, the candidates, and the voters can equally contribute to ensuring that elections are free and fair for all. The study provides recommendations to the all the aforementioned stakeholders to maintain and enhance the electoral integrity. Despite this, the following are major recommendations
of the study.
i) A more effective voter education, which makes the voters aware of their rights and responsibilities, will enable the voters to select candidates by actively participating in the electoral process. Effective voter education will also help in minimizing the prevalence of invalid votes and upholding the election codes of conduct;
ii) Private sector contributions should be routed through pooled contributions maintain transparency and accountability of the corporate sector and political parties. Corporate donations to political parties should be given tax incentives,
which will also be an indirect subsidy from the Government to the election campaign finance; and
iii) The job description of the temporary police should be increased to include observing and monitoring of the violation of the election codes of conduct in and around the area that they are deputed.