Elections: Counting the Cost of Democracy

The first phase of the local level elections is over. When this article is being written, Election Officers are busy counting votes polled by different candidates at a pace which would have put to shame the snail trying to cross the road for three hours in one particular Indian advertisement for road safety. But the delay in declaring results, especially in so-called metropolitan cities, is case enough to have a serious introspection on the efficiency of our election process including the cost of our election. The Ministry of Finance had estimated that the cost of holding local-level elections to be about NRs. 20 billion. The government zeroed on 20 million as the Elections Commission had asked for a little over NRs. 10.3 billion and past experiences show that almost an equal amount is spent by the security forces for election purposes. The actual election expenses incurred by the governments in the past always overshot the estimate. Besides, since this time the election is taking place in two phases with a gap of a whole month in-between, the expenses are bound to climb higher. A former Chief Election Commissioner was mentioning a figure of at least an extra NRs. two billion in expenses, due to the decision of having the election in two phases in one television appearance. The total cost of holding an election is not covered by the budget. Political parties, their affiliated organisations and candidates spend huge sums of money for election purposes. They organise meetings and rallies. Not to mention, they put up innumerable posters and billboards. Their volunteers go on door to door campaigning. They print pamphlets and distribute them. They have to foot bills of food and drinks consumed by their supporters in the course of the campaign. On many occasions, they have to pay for the ‘time’ of their hired supporters. They provide ‘fuel’ to their workers to aid in campaigning movements. The eateries, printers, painters, dealers of booze, flower vendors, advertisers, event organizers and musical bands along with a host of other operators do brisk business at the time of elections. Even priests and astrologers have a spike in business during this period. All these are indicators that the parties, candidates and supporters spend substantial amounts during the election. No doubt, campaigning allows the party and candidates to take their messages and programs to the electorates. It is the necessary prerequisite of a democratic election. But excessive use of wealth distorts the process and may make the election a farce. The state and the election commission, in the name of regulating the process and reducing the influence of money power, do come up with a model Code of Conduct for parties and candidates, which among other specifies what sort of methods and equipments can be used in campaigning including the maximum amount of money an individual candidate and the supporters of that candidate can use. As per the law and rules, the candidates have to file their returns of expenses after the polls. Similarly, parties too have to file their returns annually. According to the Election Commission, almost 1,500 candidates of the last CA election did not file their returns and were imposed with a fine of NRs. 500 each. Likewise, 30 political parties did not provide the details of their income and expenses and were fined NRs. 100 rupees each. Even when they file returns, nobody seems to believe in the accuracy and genuineness of the returns. This indicates a near total disregard to the rules of financial transparency among the parties and candidates. In the absence of openness and transparency of financial management of parties and candidates, the estimation of the cost of election is rather difficult. In his book, ‘Nepal’s Enduring Poverty– Non-Economic Barriers to Economic Growth’, Sukhdev Shah, a US based economist of Nepali origin has put an estimate of the election expenses directly incurred by parties, candidates, their friends and well-wishers in the second CA election at NRs. 16.9 billion, a little more than the official expenses incurred by the state agencies (NRs. 16 billion). Bhadra khanal, a Nepali journalist writing in the Kathmandu Post on 18 November mentioned a figure of NRs. 35 billion as expenses by parties and candidates, attributing the estimate to government officials. If this figure were to be true, the total expenses on elections would be over NRs. 50 billion When we count the cost of election, it is not sufficient to only sum up the monetary expenses made by the government, political parties, candidates and their supporters. A very large number of people make indirect contributions, making their ‘unpaid’ time available for the process. Besides, we have to monetise the value of the time spent by the candidates, supporters and volunteers in the process because the same time would have generated value addition to the economy had they been engaged in any other alternate productive activity. In our part of the world, there are other indirect portions of the election cost, too. People in workplaces and offices are found to be discussing prospects of candidates and election results instead of performing their duties. Enthusiastic voters travel to the place of their permanent domicile to cast their ballots. A public holiday is announced. The supporters, friends and relatives of the candidates spend time in election canvassing. These costs are not paid by the candidates and poll managers. Shah had estimated such indirect costs to be to the tune of NRs. 5 billion. As a share of the economy, the often-quoted figure is 2.5 percent of the GDP. What will be the cost this time around? The expenses to be incurred by the government can be expected to be NRs. 23-24 billion rupees. We can assume that this being an election for the local government, the political parties will spend less as well as the per capita spending by candidates will be much less. But a much larger number of candidates are competing for a much larger number of positions. In the first phase of the election, there were more than 49,000 candidates vying for over 13,000 positions in 283 units of local governments (urban and rural municipalities). In the second phase, the number of positions as well as the number of local government units will be much higher. So, the total number of aspiring candidates is anticipated to swell over 100,000. With such a large number of aspirants, one can assume that the cost is also going to balloon. Taking everything into context, one can safely conclude that the cost incurred by the parties and candidates is not going to be much less than in the CA election. Even if we assume that the parties and candidates will spend only half of the expenses they incurred during the CA elections at the price level of that time, we can safely conclude that the total cost incurred by the parties and their candidates will be over NRs. 15 billion rupees taking the total cost to over NRs. 37 billion or 1.5% of the GDP of Nepal (current GDP of Nepal is estimated to be about 2,500 billion rupees). In terms of per capita, it comes out to be over 1,300 Rupees (Nepal’s population is about 28 million). The most expensive election of the world is considered to be that of the United States. According to the Centre for Responsive Politics, the campaign expenses in the US election was USD 6.44 billion in 2016 and USD 6.29 billion in 2012. In terms of percentage of GDP (US GDP is about USD 18 trillion), it was less than 0.035 percent of the GDP. In per capita terms this comes out to be about USD 20 per person (US population is over 321 million). The second most expensive general election is considered to be the Indian General Election. According to media reports, the total cost of the 2014 General Election of India was about 5 billion dollars (300 billion Indian rupees). Of this amount, about 70 billion rupees (35 billion by the Election Commission and an equal amount by the Home Ministry) were spent by the state. The rest was expenses incurred by the political parties, candidates and their supporters. In terms of GDP, the general election cost the economy about 0.25 percent of the GDP (India’s GDP in 2014 was US $ 2.042 trillion) . In terms of per capita, cost to the economy comes out to be less than US $ 4 per person (India’s population is over 1.3 billion). The above analysis allows us to conclude that the cost of election in Nepal is very high, especially taking into consideration our low level of income. The per capita cost of the US election may be almost twice that of Nepal, but the per capita income of the US is more than 70 times that of Nepal. India with her per capita Gross National Income more than two times higher than that of Nepal (USD 1590 of India against USD 730 of Nepal) pulls off the general election at a much lower rate. A higher cost of election does not imply that we should avoid having election. Free and fair elections are the fundamental basis of any democracy. The cost of having no election is undoubtedly much higher than the high cost of election. The election not only costs the economy, it brings vibrancy to many sectors. During elections, money stashed somewhere comes back into circulation. It is also in some manner, the transfer of wealth from the “haves” (candidates and their backers) to the “have-nots,” the volunteers and workers. Even when the candidate indulges in outright vote buying, it is some sort of transfer to the poorer section of society. After all, the affluent do not vote based on money paid out to them. The only issue is that, this is a skewed transfer and it is not desirable. The very high price of the Nepali election can be attributed to a large extent to donors’ willingness to foot much of the bills. Much of the election expenses made by the government agencies do not exactly come from the coffers of the government. As there was easy money made available by donors, our agencies seem to have learnt to spend them. But this is not good for our democracy. A nation which cannot run her own elections cannot be expected to sustain the same. We plan to have three elections, local, provincial and national, within a year. Instead of having them separately, if we have them all at one go, we could have saved a lot. The United States, a wealthy nation conducts the election of its president, senate, house of representatives, state governors and state legislature on the same day. Even in India, the current Indian Prime-Minister has been harping for simultaneous state and parliamentary election. There seem to be so many expenditure items, which could be rationalised. Many of our operations like updating of voters’ list, improving the security situation, and voters’ education should be a regular activity. The high cost is probably due to the inefficiency of our machinery, as we witnessed first-hand during the counting. The entire process needs a serious audit and surgery. Analysing high the cost and use of illicit or black money in India’s election, the famous British magazine summed up “Everyone knows the elections are costly. The shame is that no one knows the price, nor who is paying”. This seems to be more true of Nepal and requires serious consideration from all concerned.

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Dr Hemant Dabadi is a Senior Fellow at Samriddhi, The Prosperity Foundation, well-known expert writing and researching on economic aspects of federalism in Nepal.