Party funding in South Korea is within a so-called mainstream model with a defining peculiarity. The main portion of party finance consists of state matching funds and political donations like many other developed democracies. One defining peculiarity is that political donations from business corporations and groups are strictly prohibited, as are foreign donations; and only citizens can individually donate – not directly to a political party or candidate, but to the National Election Commission (NEC) by way of deposits, which will be distributed to political parties on the basis of the following: (1) whether or not a party is qualified to form a negotiating group in the General Assembly; (2) how many seats a party holds relative to other parties; and (3) the ratio of the total number of votes a party obtained in the general election for the National Assembly. State matching funds can be classified under two categories: (1) regular yearly subsidy and (2) election subsidy in election years. The election subsidy is currently divided into three: (1) campaign subsidy; (2) public subsidy to encourage parties to nominate women candidates (since 2006); and (3) public subsidy to encourage parties to nominate candidates with disabilities (since 2010). Public matching funds are in proportion to the number of votes a party wins in a general election. In short, South Korean party funding has taken the route which is exactly opposite to the American one in terms of whether ‘money talks or not’. The first section of this chapter traces major evolutionary changes in Korean party finance. The chapter pays particular attention to critical junctures and nodules that shaped the development of party funding. It describes the foundation of political finance and then explicates the rationale behind the evolutionary path and trajectory, that is, to trace how and why they have taken the shape that they once were and they currently are. In the second part, this chapter opens up the current party funding system for a detailed analysis. It argues that the evaluations of the current party funding system in South Korea stand at opposite end of the continuum to the United States; that is, the political voice coming from money is highly restricted in Korea whereas it is unlimited in the United States. The system appears to be clean in a formal sense, but people still do not believe that high politics in an informal sense is as clean. The system values efficiency but at the expense of highly restricted political markets. The system achieves equal opportunities for every party but peoples’ will is not translated into donations of money. Businesses and groups cannot voice their collective views. In the name of accepting the lesser evil, the regulations of money in political market artificially suffocate the natural flow of political life: communication.
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