Authored by: Dr Iain McMenamin, Dublin City University, author of If Money Talks, What Does it Say?: Corruption and Business Financing of Political Parties, available via Oxford Scholarship Online.
Kevin Rudd recently replaced Julia Gillard as prime minister of Australia and leader of the Australian Labor Party. More than half of her cabinet refused to serve under Rudd, many of whose colleagues regard him as a micro-manager who had performed badly in his previous stint as prime minister. Indeed, his fractious relationship with his party had allowed Julia Gillard to unseat him in 2010. However, Rudd has maintained his popularity amongst voters and this explains his spectacular comeback. Rudd’s return has also helped Labor’s fundraising with many businesses contributing in the run-up to the general election. Perhaps this business money talks ideology. Maybe Australian firms prefer Rudd’s emphasis on social issues such as gay marriage to Gillard’s popularity with trade unions. If Money Talks, What Does It Say? Corruption and Business Financing of Political Parties (OUP, 2013) shows that business financing of the Australian Labor Party sends a pragmatic, not an ideological, message: contributing businesses expect to receive special consideration of their lobbying efforts. Indeed, I predict that business contributions to Labor increase as it becomes more popular, especially when an election is due. Labor’s competitors in the Liberal Party also gather pragmatic donations, but they can rely on ideological donations, which are given to the party whether in government or opposition and regardless of its popularity.
Business money speaks the languages of pragmatism and ideology in other countries too. In Canada, before the abolition of business donations, there were very few ideological donations because the two dominant parties were pro-business and centrist. Germany’s main political divide, like Australia’s, is between left and right. When German businesses donate they overwhelmingly favour the right. Nonetheless, very few do so because Germany’s political economy offers little incentive for firms to finance politics. Individual enterprises do not tend to seek a competitive edge by lobbying the state. The most important policies for firms are not those directly provided for the state but rather those delivered by their business associations.
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