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Let's take Iceland as an example. They have only 338,000 people and their GDP was a mere $20 Billion USD in 2016. There are therefore several billionaires who are richer than the entire economic output of the country.

What prevents rich foreign interests from funneling tens of millions of Euros to Icelandic elections in order to elect people who are conducive to their interests? Or perhaps it's already happening and all small countries are controlled by their larger neighbors?

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    This is already happening a lot in various African countries. Many African dictatorships are made and destroyed by the influence of foreign investors.
    – Philipp
    Aug 30 '17 at 13:19
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    You're implying that small countries should defend themselves more from this threat than the large. Wouldn't it be safeish to assume that buying a politician from Iceland or USA would give you the same amount of power although it would be a smaller fraction of the larger country.
    – Communisty
    Aug 30 '17 at 13:35
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    Is there any plausible answer beyond the degenerate (in a mathematical sense) one of "it's illegal and corruption laws threaten bought politicians with jail"?
    – user4012
    Aug 30 '17 at 13:39
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    @JonathanReez Which doesn't mean it's not happening. In the current election in Germany there is one party which gets most of their campaign advertisement financed by a political NGO from Switzerland.
    – Philipp
    Aug 30 '17 at 14:03
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    It is quite straighforward to limit this in a country of any size where the rule of law is generally accepted. People involved in politics in the USA might find it incomprehensible that national elections could be run with a maximum possible expenditure limited to £6m (million, not billion!) per political party, and where it was mandatory to report every item of income and expenditure greater than £200 for scrutiny after the election - but that's how it works in the UK. The issue of "interference" by foreign funding simply doesn't arise - it's illegal, period.
    – alephzero
    Aug 30 '17 at 19:38
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In a small electorate, personal relationships are more important than media spending; and voters are likely to resent attempts at outside interference.

An extreme example occurred in the 2008 general election on the island of Sark in the English Channel.

Sark had a total electorate of only 474 people and elects a parliament of 28 members. The Barclay brothers, whose net worth at the time was approximately GBP 1.7 billion, live on a neighbouring island and attempted to promote candidates friendly to their interests.

Their efforts were not successful: Seats were won by only 2 of the 9 candidates endorsed by the Barclays, and by 9 out of 12 candidates the Barclays had denounced as undesirable. The Barclay brothers subsequently attempted economic punishment of the islanders, which failed to secure the influence they wanted:

When it became apparent that only about five candidates they had supported had been elected, the Barclay brothers announced that they were shutting down their businesses on Sark — hotels, shops, estate agents and building firms — leaving about 100 people, or a sixth of the population, out of work. The closures started almost immediately following the announcement. Diana Beaumont, the wife of Seigneur John Michael Beaumont, commented that "[the Barclay brothers] were the ones that started all this democracy business, now they don’t like it because they haven't won." The States of Jersey, sitting in session on 12 December 2008, resolved to send a message of support to its sister island of Sark.

In January 2009, the Barclays quietly began reversing the shutdown process.

Further attempts by the Barclays to assert greater control over Sark have also been unsuccessful, and they lost a legal battle with the island's government in 2014.

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    I've seen exactly the same thing in a small-town election in the United States: an outsider came in and tried to use his big-city money and big-city campaign techniques to get himself elected mayor. When election day came, he got two votes: presumably from himself and his wife.
    – Mark
    Aug 30 '17 at 22:28
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    While this is undeniably true, it only works on tiny communities where everybody knows each other. A small country, no matter how small, is too large for this dynamics. Also, it doesn't cover the other, most subtle tactic used by foreign interests: support all the parties. Israel funnels a lot of money to both democrat and republican candidates in the USA; while I won't go as far as to say Israel has bought US support (the US has its own motivations to support Israel), it's always handy having a lot of paid friends in the upper echelons of the US government.
    – Rekesoft
    Aug 31 '17 at 8:19
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    @Rekesoft: Citation needed. Foreign contributions to US campaigns are illegal; contributions through the "soft money" loophole may exist but are by definition undocumented. There are many examples of total failure by well-funded campaigns in slightly larger electorates; for example, the Jeb Bush campaign in the 2016 New Hampshire primary spent more than twice as much as any rival, and finished in a poor fourth place. Aug 31 '17 at 8:32
  • @royalcanadianbandit The money goes from Israel - and not directly from the government, but through some more innocent-looking NGO's - to some american citizens - normally jewish, but not exclusively - who make the contribution. Since it's from an american individual or organization, it's perfectly legal.
    – Rekesoft
    Aug 31 '17 at 8:36
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    Buying candidates is easy. Buying people who can win and hold office is hard. In the case of Sark, the Barclays had no great difficulty finding candidates willing to represent their interests, but were unable to get them elected. Aug 31 '17 at 20:16
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What prevents rich foreign interests from funneling tens of millions of Euros to Icelandic elections in order to elect people who are conducive to their interests?

Because money doesn't win elections. Votes (sometimes in the right places) do.

In 2016, Hillary Clinton outspent Donald Trump by more than two to one. And lost. In 2014, Eric Cantor outspent David Brat by five to one. And lost. In 2010, Meg Whitman outspent Jerry Brown by almost five to one. And lost.

There are of course many more examples of the better funded campaign winning. But there is a simple reason for this. Both votes and contributions are signs of support. So more support usually causes both contributions and votes. But when support diverges, votes win.

Clever use of money may be able to allow someone who is relatively unknown to become known. But it can't make a candidate with an unattractive message win. A simple counter message can work if it is believable. E.g. "The Iceland candidate, not the foreign billionaire candidate."

And all this assumes that rich foreign interests care about Icelandic elections. Yes, a Bill Gates could afford to outspend domestic interests and flood Iceland with advertising. But why would he want to do so? Why not spend the same amount of money on an election in some place where he actually lives? Or spend it on something other than elections?

Contributions aren't magic. They don't automatically confer anything. Candidates still have to convince people that their positions are good. Money just helps them get out the message. And even if Gates (or whomever) succeeded, what could the Icelandic government do for him? He doesn't live in Iceland nor do business there (except in that Microsoft does business everywhere). He would probably rather control Microsoft than Iceland.

Businesses do confer ownership with money. Microsoft has nearly three times as much revenues as Iceland has GDP. And Gates' Microsoft stake pays him money and makes him richer. Why would he sell off some of his ownership of Microsoft to meddle in an election that doesn't really matter to him?

all small countries are controlled by their larger neighbors?

If Mexico is controlled by the United States, then why aren't they building Trump's wall?

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    This answer reeks of survivorship and confirmation bias. You are only looking at the candidates who outspent and still lost. For all we know, you've listed every single example of this occurring in all of history. You need an actual study to make this point. I agree with the rest about foreign billionaires have better, more local, things to do with their money.
    – Shane
    Aug 30 '17 at 20:53
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    Mexico is hardly a small country; in fact, it's the 11th largest in the world.
    – Marcel
    Aug 31 '17 at 21:14
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    @Shane Some articles that support the idea that money isn't everything in politics. Aug 31 '17 at 22:54
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Probably having laws and a civic philosophy in place that does not encourage or legalize graft and bribery. We see that many small countries struggle with it, but the ones that don't have rules and laws in place, and probably a great degree of transparency to the citizens, as well.

The problem with trying to get an American brain around that concept is that it is so unrelated to the system and philosophy we have here, that the very idea is "foreign," in several ways.

Both Iceland and Sweden, to cite two examples, have public financing of their elections. There is no unlimited ability to spend/buy one's way to office, there is no fundraising component to political service and, therefore, there is no mechanism for a wealthy oligarch to purchase his/her chosen candidates a seat.

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    ...and a great degree of trust in people and institutions by citizens. Nordic countries are in general very high, the US is middling and Russia and African countries are abysmal. Probably, a lot of it comes down to: is the government "us" or is it "them?"
    – rob
    Aug 31 '17 at 21:24
  • @rob - That was kind of what I was hinting at with my "civic philosophy" reference, but that's something where one can get into the deep weeds with users who tribally defend their own systems as "the best" or infallible, so I focused more on concrete legislation and rules. Excellent point, though. Sep 1 '17 at 14:23
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Short answer to your question is this:

Small countries cannot prevent foreign interests from buying their political elite.

This is probably happening in all countries in some extend. What sets apart a small county from another small country in terms of overall prosperity depends on the way the institutions of the country work.

As argued by Daron Acemoglu in the book “Why nations fail: The origin of power and Poverty” (which I highly recommend) the man-made political and economic institutions underline economic success of a nation.

Why nations Fail

If you live in a society that creates incentives and rewards innovation in a way that allows everyone to participate in economic opportunities and there is ACCOUNTABILITY in all levels then foreign interests and in extend who actually governs are irrelevant in the big picture of prosperity.

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Living in Denmark, I'd say that nothing is holding big < insert industry > back from buying politicians. Our political parties don't disclose who gives them funding, simply because it isn't required by law.

This has led to politician pushing for wider laws regarding what they must make public. Recently our tax collection agency "just plain lost" about 19 billion USD as a result of a lax corporate oversight.

Media has stopped covering this, and other scandals have arisen since. But I'm pretty sure, that at least, Danish politicians increasingly act in favour of who really pays their salary.

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First, you have to keep in mind that a small country does not usually give as many "benefits" as a big country.

Another variable to keep in mind is that there is not so much difference between a politician from Ireland and one from the USA. Is it cheaper to buy a politician from a small country? (With respect to the relation quality / price)

Another question, why is a small country easier to buy? There are small countries like Monaco, San Marino, Luxembourg or Ireland itself that have very transparent tax and political systems.

Another issue aside is the third world countries.

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  • Those small countries are tax shelters and heavily dependant on foreigners. Sep 1 '17 at 2:05

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