19th Presidential Elections: Publically-funded Elections in Korea

One of the most important elements of any election is the way candidates and political parties raise campaign funds and the rules governing how they spend them. In Korea the Public Official Election Act and the Political Funds Act set out rules for publicly-funded elections in which candidates can be reimbursed their campaign expenditure after the election when certain conditions are met, encouraging more candidates to run and promoting transparency in the way election funds are spent. With the campaign period only two weeks away, it’s important to understand how this system works and what it aims to achieve.

In essence, the presidential elections are publicly funded. Candidates can be reimbursed their campaign spending after the election up to a certain limit based on the number of people in the country. However, not every candidate can receive all of their campaign spending. Candidates who are elected, receive at least 15% of the valid votes or pass away are eligible to receive all of their campaign spending up to the limit, while candidates who receive between 10% and 15% of valid votes receive half of the amount of their total campaign spending. Any candidate who receives less than 10% of the valid votes does not receive any of their campaign expenses back.

The system is designed to do two things. Firstly, it aims to even the playing field between candidates and ensure that campaign spending is more even. If all candidates have the opportunity to receive legitimate campaign spending back, it means that it is not simply the candidate with the most resources who is able to campaign the most. However on the other hand, this system prevents a very large number of candidates who do not have a serious intention to run for office from running for election to use state funds. This system treads the happy medium between encouraging candidates, while also ensuring public money is spent fairly and not wasted on non-serious candidates.

The campaign expenses guide for the
19th presidential election

In addition, candidates can only receive funding they have reported correctly within 30 days after election day. Before the whole campaign period begins, candidates nominate an account manager who must document every single Won spent on campaigning and report it to the NEC once the election is over. The NEC has the authority to withhold reimbursements if any spending is found but not listed in the accounting report, any illegal spending is found or any false report is made. In addition, if the financial record is not completed within the allotted 30 days, the candidate may not be entitled to reimbursement.

To prevent false claims, object evidence such as receipts, bank statements and photographs are required. All these financial records are placed on the NEC website for anybody to read, ensuring transparency and allowing citizens themselves to inspect campaign spending that has come from the state budget by candidates

Calculating the limit for reimbursement is done according to the number of people living in the constituency. Seeing as the presidential election operates with a single nationwide constituency, the calculation is simple. You multiply 950 won (around $0.80 USD), the base number for campaign spending per person by the number of citizens in the country. For this election, the maximum amount of campaign expenses that will be reimbursed will be 50.9 billion Korean won, or around $44.4 million USD according to the exchange rate as of April 11, 2017.

Money can also be raised for candidates, but in Korea it may only be done through Political Funding Associations, otherwise known as PFAs. Political donations are not made directly to candidates, instead candidates nominate a PFA that takes any donations on their behalf. In a similar to campaign expenses, every Won must be reported by these PFAs and any unreported donations can result in significant consequences for both the receiving PFA and the donor.

There are also limits for donations. For PFA’s for presidential candidates, a single donor can give no more than 10 million won ($8,700 USD) to a single PFA, and can give no more than 20 million won ($17,400 USD) over the course of year to PFAs. All donations of over 100,000 Korean won ($870 USD) must be listed with the donors name, but any under that figure may be made anonymously. The aim is create a system where candidates are funded by a large group of small contributors rather than a very small number of large donors. The PFA must then pass these funds to candidates for use in campaigning, and a small percentage can be kept for covering direct expenses for raising funds.

The Korean system has been developed over the last three decades as the country has moved from rigged elections and authoritarian rule to one of the foremost democracies in the world. After suffering from vote buying and gift giving in the past, the system is a significant achievement that has led to a fairer and more transparent election system overall. 

Author: Luke Butcher
Administration and International Affairs Division