This book argues that to fully grasp the decision-making of politicians and political actors in developing countries, we must first understand how politicians finance their campaigns for office—and to whom they are indebted and expected to repay.
Political Financing in Developing Countries focuses on Ghana in depth, a country often held up as an example of a successful, two-party democracy with regular party changes in government. However, it is unlikely that candidates and political parties are wealthy enough to finance the increasing costs of campaigns and constituent demands, and successful democratic outcomes could be masking a system that actually hinders development progress. Drawing on nearly 200 interviews and extensive fieldwork, this book posits that political funds are extracted by an iron square of politicians, bureaucrats, construction contractors, and political-party chairs which rigs the procurement of local-development projects to generate kickbacks. The iron square remains robust across party changes in government due to reciprocity obligations that minimize contractors’ income risks. Ultimately, this web of kickbacks diminishes the quality of development by reducing the funds available for projects and distorting incentives to monitor projects. To break this iron square, the book recommends replacing sealed-bid procurement—a "best practice" that ignores on-the-ground realities—with a system that accounts for income stabilization and social obligations.
Overall, the book argues that scholars of development should advance research on political finance to identify and then alleviate the games that decision makers must play to survive in the political sphere. Political Financing in Developing Countries will be an important and timely resource for scholars across development studies, politics, economics, and African Studies.
Table of Contents
Introduction: Two Puzzles in Politics
1. Politicians, Bureaucrats, Contractors, and Chairs
2. The Iron Square of Political Finance
3. Diversification, Kinship, and Failed Public Goods
Conclusion: Towards Antiheroes and Machine-Guided Development
Joseph Luna is an Economist at the John A. Volpe National Transportation Systems Center, USA. He holds a PhD in Government from Harvard University and has advised international-development projects in South Asia and Sub-Saharan Africa.
"Joseph Luna’s book is an invaluable aid to policy professionals, academics and development planning practitioners to understand the problem of public policy and corruption. It is evidence-based and combines empirical knowledge with in-depth theoretical and historical knowledge. It is a required reading for academics, policy makers as well as students." — Kwame A. Ninsin, Emeritus Professor of Political Science, University of Ghana
"This is an exceptional contribution to the study of political financing. Luna unpicks the dynamic interactions among key players with impressive analytical precision, deftly applying game theory and collective action models to examine his cases. He tells a story that will resonate with scholars of political corruption and clientelism everywhere, yet also illuminates several features of low-resource contexts which amplify the usual pressures on political actors. The book is also a gripping read, fluently written and rich with the personalities and narratives of the protagonists." — Elizabeth Dávid-Barrett, Senior Lecturer in Politics and Director of the Centre for the Study of Corruption, University of Sussex, UK
"This is a very timely book and the author has done a tremendous job of synthesizing a large amount of both theoretical and empirical evidence. I very much enjoyed reading this book. It shows the innovative ways party politicians circumvent the procurement rules to promote party politics at the grassroots. What interests me most is the author’s analysis of the ‘Iron Square’ of political finance in Ghana. The ‘Iron Square’ represented by bureaucrats, party chairs, contractors and MMDCEs (politicians) is significant and may be applicable to other African democracies. Certainly, this book a relevant addition to the growing body of knowledge on political financing in Africa’s electoral democracies. It is a must read for any student of party politics in Africa and beyond." – George M. Bob-Milliar, Department of History and Political Studies, KNUST-Kumasi, Ghana