The recent indictment of the KMT's former top cashier Liu Tai-ying (劉泰英) has caused a stir nationwide and has also incited severe criticism of money politics. There is much criticism saying that if Liu represents the money politics of the old government, then there is no lack of political rewards or policies aimed at benefitting specific capitalists under the new government. Although it is impossible for the new government to keep aloof from such criticism, a more important issue is the need to understand the systemic foundation underlying the old and new governments' different varieties of money politics, and its effects on the future of the nation's democratic politics.
KMT money politics has particular characteristics. Huge party assets (and national assets that at any time could be used as party assets) bestowed a high degree of independence on the party. This led to a relationship between government and industry that placed the government in a more powerful position. It made it less likely that government policies would be hijacked by specific financial groups.
The essence of KMT money politics was to release national economic resources in exchange for political support on specific issues. Contrary to what many people believe, however, this practice did not begin during the Lee Teng-hui (李登輝) era -- such exchanges of benefit between the KMT and local factions existed under former presidents Chiang Kai-shek (蔣介石) and Chiang Ching-kuo (蔣經國), a relationship that academics call "clientelism."
During the authoritarian era it was not as necessary to obtain political support. Thus, the reason why money politics were less serious than at other times was not that the authoritarian leaders were "cleaner," but rather it was a result of the political environment.
Due to the intense political competition brought on by democratization, by Lee's time, the KMT needed more "silver bullets" to target votes, and especially financial groups with their enormous capability to motivate voters. During the privatization of many state-owned enterprises and in build-operate-transfer projects, many opportunities were therefore given to capitalists holding real political power.
Everfortune Group's collapse over the past two years is an excellent example. Everfortune was a major political force behind the rise of Taichung. From the deregulation of the banking industry and the Yueh Mei Recreational Area development project to the airport MRT project, this brought enormous benefits for Everfor-tune, making it a major beneficiary of economic liberalization. To a large extent, the many financial-assistance projects directed by Liu during the late 1990s -- apart from furthering his own personal relationships -- also helped the party stabilize.
In comparison, the DPP needs private financial support and is therefore more easily restrained by financial groups. Since it lacks organizational cohesion, powerful politicians rely on their own skills to get a share of the resources. The exchange of benefits sometimes seems coarse and chaotic. Simply put, parties and politicians give in to the temptations provided by the system.
Since the KMT's political foundations were built on an exchange of favors with private organizations, it exchanged resources for votes. The DPP, however, ex-changes resources for financial support because its voter base consists largely of people identifying with the party, and because it lacks independent economic power. These are two different kinds of money politics.
One interesting question to consider is what model the blue camp will choose if it is returned to power. Obviously, at a time when the KMT no longer possesses huge party assets, its independence will be greatly diminished. We can infer that the problems faced by the DPP today may occur under a blue coalition. We could even ask if past targets of the KMT's money politics, especially those that have lost out under the DPP, would rise again and put even heavier pressure on the KMT.
This is a serious challenge to the nation's democracy, and it is also an inherent weakness of capitalist democracy. The Enron scandal and others like it prove that it is difficult also for advanced democracies to avoid this structural weakness. However, faced with the temptation of money politics inherent in democratic systems, advanced nations have more regulations making exchanges of benefits -- eg political donations -- transparent, or, as in Europe, they subsidize elections with public funding, thus lowering the financial needs of candidates.
Even more importantly, these countries have more effective media supervision and legal sanctions. This is just what we have emphasized -- if we want to understand the workings of money politics, we have to understand systemic temptation. We must set out from the same point of departure if we want to regulate money politics. The indictment of Liu is an important step for the nation's legal system, but Taiwan still has a long way to go to consolidate its democratic system.
Chang Tieh-chih is a doctoral student in the department of political science at Columbia University.
Translated by Perry Svensson
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