Political parties in North Macedonia continuously rank at the bottom of citizens’ trust in institutions and organizations. Citizens’ disenchantments with parties, their intentions, and performance in government have resulted in high levels of apathy, low voter turnout, and emigration from the country.
The International Republican Institute (IRI) has been working with political parties in North Macedonia in capacity building for internal organization, policy-making and research capacities, and other areas that can help them serve citizens better. Following legal changes in 2019, i.e. the adoption of a new Law on Free Access to Public Information, which included political parties as public information holders, IRI identified a need to support parties to improve compliance with the newly introduced financial transparency obligations.
As part of this support, IRI conducted training for parties on their legal obligations regarding financial transparency, supported evidence-based policy research on financial transparency and party funding, coached party officials on financial transparency, assisted some parties in upgrading their websites with financial data, and among others, sponsored a multi-party study visit to the United Kingdom (UK) on party financial transparency.
The study visit included representatives from the four largest political parties, SDSM, VMRO-DPMNE, DUI, AfA, as well as representatives from the Agency for Protection of the Right for Free Access to Public Information. Through meetings with Heads of Compliance in the Conservative, Labour and the Liberal Democratic Party, the Chair of the Committee in Standards in Public Life, Open Government Partnership, and Members of Parliament, finance and election experts, the group learned about compliance and transparency practices in the parties and how compliance is assured from the regulators. The interactions with the UK officials and politicians provided lessons and perspectives from the UK as a country with a high level of financial transparency and compliance. In continuum, we provide a summary of where we stand as a country on this matter and what experiences can we take from this visit to improve compliance and transparency at home.
Where Do We Stand on Party Financial Transparency?
The visit to the United Kingdom has taught us one thing: North Macedonia isn’t that bad in terms of regulations pertaining to transparency and access to public information. A reason to think that way would be the fact that, unlike the UK, in North Macedonia according to Article 3 of the Law on Free Access to Public Information political parties are defined as “holders of public information”. This means that political parties are obliged to submit not only final year accounts, donations, and campaign reports, but they are also obliged to entertain any request by citizens or media for information regarding their revenues and expenditures.
Nevertheless, as expected, there is a problem with the transparency of political parties in Macedonia. The laws that mandate the publication of financial reports do not regulate the format in which those reports are submitted, therefore, what usually happens is that political parties do publish reports on their websites, but they do it in formats that tend to be not so user friendly, thus making it difficult for citizens or the media to read and make an analysis of the revenues and the expenses political parties incur. That is why, although nominally the criteria of transparency are fulfilled, in real terms the desired level of transparency is not met, as would be the case with the data published on UK’s Electoral Commission’s website.
That is probably one of the reasons why citizens have little trust in political parties, and that is a sad outcome. The ongoing initiative undertaken by IRI to improve the transparency of political parties in North Macedonia seems to be a candle of hope and we remain hopeful that it will show positive results.
What Can We Apply?
In Macedonia, although the State Audit Office has the obligation to publish reports by political parties, they are not even close to what they should be in a structured and analytical format. The legal obligations for publishing the data of the political parties in the UK are the responsibility of the state regulatory/supervisory body, the Electoral Commission. They do it in a very analytical way and most importantly in open data formats that are easily accessible and whose reliability largely depends on the trust that citizens have in political parties.
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By applying this model in Macedonia, where only one state institution will create a unified system in which data on the financing of political parties can be easily entered and processed, new standards will be created that the political parties in Macedonia will be obliged to follow and respect them, and most importantly with such a system, the citizens will have a higher trust in the political parties.
But after the eventual application of this good practice, perhaps the most important one follows. Compliance with regulations in the UK is crucial for all social actors. Just like in our country, political parties complain that the authorities do not understand the dynamics of political parties and sometimes make irrational decisions, but the key to stability and transparency is that political parties respect the guidelines of the authorities and literally comply with the legal norms.
There is a big difference between the systems of our country and the one established in the UK, but when we are looking for best practices, the UK is a country that serves as one of the best examples of financial transparency of political parties and transparency of the system in general. Experiences gained in the UK clearly show that when you have a well-established process, with concise legal rules and effective enforcement policies then transparency is seriously linked to reducing corruption and the rule of law.
How Can Governing Parties Ensure They Maintain and Advance Financial Transparency Practices?
The most effective ways for governing parties to maintain and advance financial transparency practices is to streamline these obligations of the parties towards the institutions. This can be done with legislative reform or based on the experience from what we saw in the UK during the study visit. In North Macedonia, some of the institutions which can bear this responsibility are the Central Election Commission, the State Audit Office, or the State Commission for Prevention of Corruption.
A policy proposal to advance financial transparency, there should include a legal obligation for parties to submit financial reports within a certain deadline, whether it is 3 months or 6 months, and to make public all issues related to the finances of political parties. So, this will be the best method to maintain and advance these practices - Changes to the current legislation to improve the regulation of funding and the transparency of financial reporting of the parties, as well as of all entities (private and state) which receive the state budget money. This must be achieved with a broad political consensus among all parties.
How Can We Nudge Parties Towards Transparency?
The link between money and politics is inevitable; however, it creates a serious risk of negative trends such as corruption and conflict of interest. To detect and overcome this challenge, transparency as a basic and most effective tool should be the cornerstone of party funding.
In order to ensure transparency, parties have a legal obligation to prepare accurate and thorough financial reports for regular party operations and for election campaigns; to make them available to the public in a searchable, processable, and understandable format; and to submit them in a timely manner to the competent authorities.
Even though this is a legal obligation and a necessary precondition for effective external control, it seems to be insufficient. It is essential to establish a system of internal party control that includes regular financial accountability to party members to maintain trust in the party. The oversight and control system should be based on three basic principles - prevention, detection, and sanction. The main goal of prevention is to encourage responsible persons at every level of the party structure as well as the candidates to adjust their practices in order to comply with the previously defined and adopted requirements and rules.
In addition, the system should include regular in-house training for the party leadership and for all the staff and volunteers from different sectors; preparation of periodic reports, and conducting a periodic transparency test with an internally designed transparency index for all levels, in order to detect and overcome weaknesses.
Sanctions are crucial to achieving the goal. Only with a higher degree of intra-party financial responsibility and an effective party mechanism for oversight and control of funding, transparency will become a real value of the political parties, and not just a legal obligation.
(Each of the authors contributed with one section of the blog. The order of the names of the authors is in accordance with the order of their contributions in the article)
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