We need to rethink how political parties are funded

A significant yet mostly avoided question in Bangladeshi politics is who is paying for it and what they are gaining from doing so. Finance in politics is usually discussed in terms of legal ceilings and declared election expenditures, often leaving the structural issue unaddressed: money has effectively become the gateway to political participation.

Existing legal provisions limit an MP candidate to spend up to Tk 10 per voter, up to a maximum of Tk 25 lakh, based on the number of voters in the constituency. Yet the 2026 election exposed how little this ceiling resembles political reality. All 1,981 candidates declared their combined campaign expenditure just a little below Tk 400 crore, while independent research highlighted the actual cost of securing a nomination to running a competitive campaign to be much higher. A Transparency International Bangladesh (TIB) study of 2024 estimated that the average candidate expenditure in elections is roughly six times the legal ceiling.

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National elections are only the tip of the iceberg that come once every five years. But political parties operate all year. They require a flow of money to function, maintain offices, pay their activists, and cover recurring expenses. Yet who finances these activities is far beyond proper accountability and transparency.

This is the time to discuss a reform that might have been debated in different circles for years, but has never been attempted—public funding of political parties. At first glance, it might sound like a bad idea, which is understandable. The majority of citizens may perceive it as legalised facilitation of corruption. We must evaluate public funding not against an ideal world, but against Bangladesh’s current reality: a system where money controls political access.

When the real cost of politics exceeds the legal ceiling, the extra money has to come from somewhere. And it usually comes from wealthy corporate and business networks expecting something in return for their patronage and donations. Getting a nomination is often a transaction where a candidate’s path to a party ticket depends on paying the party leadership. This practice also resulted in a surge of businessmen in parliament, while many grassroots candidates with genuine public support and decorated portfolios are left out.

Unregulated, unaccounted money with little to no transparency eventually becomes a threat to democracy. The Jack Abramoff scandal in the US in the mid-2000s showed how lobbying money, political donations, and campaign contributions by corporations can buy them access to shape state policies. In India, the electoral bond scheme allowing anonymity for corporate donations was struck down in 2024 by the Indian Supreme Court, which ruled that voters have the right to know who is funding the parties.

The idea of public financing is one of the most tested responses to this threat of politics being captured by the oligarchs. In Germany, public funding is partly linked to donations and membership contributions, alongside their electoral performance, creating an incentive to cultivate a broad base of private support rather than depend exclusively on large donors. Nordic countries link public funding to electoral support, with Denmark and Norway tying significant portions of funding directly to votes received, while Sweden and Finland base funding primarily on parliamentary representation.

A properly designed public funding system can narrow the gap between a well-connected veteran politician and a first-time contestant with no corporate backing. Public funding systems can also be structured to reward parties by setting criteria on proper gender and minority representation, contributing to social justice and equity.

But successful examples of public funding in Europe certainly don’t guarantee successful implementation in Bangladesh. Given the socio-economic environment and a parochial, subject- and patron-clientele-centric political culture in this country, significant challenges lie ahead. Implementing public financing on top of the existing system, without first fixing the Election Commission’s ability to scrutinise and verify political parties’ finances, is unlikely to improve the status quo. Without addressing the socio-political variables and ensuring proper enforcement and oversight, simply copying the concepts and pasting them might lead to isomorphic mimicry. But by acknowledging the risk, rather than just waving it away, the concept of public funding deserves discussion.

Proper implementation of public funding will require a well-planned design where enforcement of rules is a precondition rather than an afterthought. To receive public funding, political parties will be obligated to publish detailed audited accounts of their financial transactions verified by an independent body entrusted by the EC. Large private donations above a set ceiling must be mandatorily disclosed. Campaign transactions will move towards digital channels, which must be traceable, as cash-based financing will keep post-election disclosure symbolic no matter what the funding formula says. Built and monitored this way, public funding can become a lever that forces transparency rather than a mere state subsidy onto an unaccountable system.

A TIB study shows that Bangladesh ranks 13th among the world’s most corrupt nations. Political finance is one of the addressable spheres of corruption, as the underlying problems are well understood. Money is surely the fuel of politics. The objective of public funding is not to remove money from politics altogether, but to stop money from deciding who can get into politics and who cannot. It is a consequential political problem and not likely to be solved until the money in politics is finally followed.

Muhtasim M. Musanna is a student in the Department of Public Administration at Dhaka University.

Views expressed in this article are the author's own. 

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