May 4, 2023

Democratizing Democracy: Is More Democracy Always Better?

By Jorge Rojas-Vallejos[*]

 

Over the past decade, Chile experienced two monumental political reforms. Under the old rules, the country’s two main political blocks, Concertación (center left) and Chile Vamos (center right), jointly dominated congressional representation after the country’s return to democracy in 1990. Yet, they both spearheaded changes that weakened their political oligopoly. The first reform replaced the binomial electoral system, which over-represented rightwing parties, with a D’Hondt proportional one. The second changed how political parties were financially supported, introducing public financing for electoral campaigns.

 

Chile’s incumbent politicians agreed to implement a more “representative” electoral system and public funding for political parties and candidates after considering several perspectives. The argument for electoral reform was to improve the representation of marginalized political groups and promote greater ideological diversity. Public campaign financing was a reaction to several “corruption” scandals associated with members of Chile’s Congress who were paid by donors to promote and support bills intended to benefit big corporations.

 

Changes to Electoral Rules

 

Chile’s current constitution, introduced in 1980, safeguarded the military and its political allies after they surrendered power in 1990. It awarded Senate seats to the top generals, granted the armed forces authority to choose their own leaders, and allocated 10 percent of Chile’s copper revenues to the military’s budget. It also provided amnesties to the former dictator Augusto Pinochet (who was made a senator for life) and other military brass and banned extreme parties on the left. Perhaps its most important legacy was the binomial electoral system, which was crafted to overrepresent conservative parties.

 

The binomial electoral system introduced two member districts in which the political alliance with the highest number of votes received the first seat. That same alliance could only win the second seat if its votes were more than double those of the second most popular alliance. Otherwise, the second alliance won the seat. This allowed rightwing parties to obtain parity with the left: Chile Vamos could win seats even against the alliance of leftist and centrist parties (Concertación) if it simply won more than one third of the votes in each district. In 1989, the rightwing alliance received only 34.2 percent of the votes but 40 percent of the (120) seats; in 1993, it received only 36.7 percent of the votes but 41.6 percent of the seats; in 1997, it received only 36.3 percent of the votes but 39.1 percent of the seats; in 2001, it received only 39.1 percent of the votes but 47.5 percent of the seats. Meanwhile, consider that in 1997, the Communists received 6.9 percent of the votes but no seats.

 

In 2015, Law 20840 was promulgated to end the binomial electoral system and create the proportional, more inclusive D’Hondt system. It increased the number of members of the Lower House from 120 to 155, and similarly, the Senate grew from 38 to 50. The electoral jurisdictions associated with Congressional elections were also modified for both the Lower House and the Senate. The number of districts in the Lower House was reduced from 60 to 28, while the Senate shrunk from 19 regions to 16. The first election with this new system occurred in November 2017.

 

This electoral reform changed the distribution of forces in Congress immediately. Some parties increased their representation, as was the case with the Communist Party. Other radical left-oriented but smaller parties could now get into the legislature, while traditional parties with membership in Chile Vamos and Concertación reduced their share. This reduction in the political power of the incumbent parties was significant because, to approve bills, these blocks were now compelled to negotiate with these more extreme forces. As a result, the political coalitions changed, but more importantly, on the left side of the political spectrum, where parties became more militant and radical and called Chile’s entire political economy into question. Today, there are four coalitions: Apruebo Dignidad (left), Socialismo Democrático (center left), Chile Vamos (center right), and Republicano-Socialcristiano (right).

 

Changes to Campaign Finance Laws

 

In 2016, Laws 20900 and 20915 were promulgated to change how political parties obtained financial support. Previously, parties usually obtained private funding from people or companies. However, these financial resources did not need to be declared, so political parties did not do so.

 

There were three prominent corruption scandals around private financing for campaigns that moved the needle on public opinion around this issue: Corpesca, Penta, and SQM.: Corpesca (2013), Penta (2014), and SQM (2015). Corpesca is a large fishing firm controlled by the Angelini Group, and Penta is a financial corporation funded by the Délano and Lavín families. Likewise, during the scandal, the mining company SQM was directed by Julio Ponce Lerou, the son-in-law of former dictator General Augusto Pinochet.

 

Although the people managing these companies were historically more connected to Chile’s right-wing parties, they financially supported almost all the political parties with legal existence. The more complicated situation was associated with SQM because of the relationship between its CEO, Ponce Lerou, and former dictator General Augusto Pinochet. This put high political pressure on the traditional parties that the minor parties brilliantly exploited, resulting in these significant reforms.

 

Law 20900 established a mechanism by which political parties legally recognized by the Electoral Service (SERVEL) may receive public funds. This support is aimed at electoral campaigns and the party’s operational expenses. For each vote obtained by a candidate in any election, the state will refund 0.04 UF (approximately 1.75 USD) to male candidates and 0.05 UF (2.20 USD) to female candidates. At the same time, for each vote obtained by a candidate presented by the party in a parliamentary election, the party will receive 0.04 UF in quarterly payments for the following four years.[1]

 

Even though before these reforms new political parties were being born, they did not have access to power in Congress without negotiating with the traditional parties. A case to highlight is the Communist Party (CP). In the 2013 Congressional Elections, the CP signed an Omission Agreement with La Concertación that was a mechanism for the CP to compete with a high probability of electing their candidates. As a result, in this election, the CP obtained six members of the Lower House out of 120. That was 100% more than the seats it obtained in the 2009 legislative elections.

 

These three laws, 20840, 20900, and 20915, introduced incentives that have significantly impacted the Chilean political map. First, the number of political parties more than doubled. This makes the negotiating process in Congress more challenging because it increased the time needed to reach agreement and reduced the quality of bills and laws that were introduced. Second, the existence of generous public financial support for political parties has incentivized groups to establish populist parties with the sole goal of obtaining public money. Third, political parties have become vehicles for charismatic politicians or political dynasties to run for office and, in some ways, made parties less ideological and more opportunistic.

 

After a congressional election, a party must obtain at least 5% of the popular vote or seat four members of Congress (Lower House or Senate) to continue to legally exist. Many parties are dissolved after Congressional Elections.[2] However, they quickly regroup after that and collect the signatures they need to create a “new” party with the same or a similar name to obtain public money again and live to fight another day.

 

Conclusion

 

The D’Hondt proportional inclusive electoral system and the public funding of political parties have significantly lowered the political entry barriers to small but well-organized groups creating a favorable environment for the rise of populism and polarization. These reforms aimed to represent political groups better in Congress and hence a greater variety of ideas; however, it seems that they tended to over-represent radicals and under-represent moderates, engendering growing conflict and polarization.

[*] E-mail: jorge.rojas.v@unab.cl Assistant Professor, Facultad de Economia y Negocios, Universidad Andres Bello, Santiago, Chile.

[1] Congressional elections are held every four years. The Lower House Chamber elections are the ones that defined the amounts of public money to distribute between the parties.

[2] In the 2021 Congressional Elections, 12 out of 27 parties were dissolved.