When the state refuses accountability: The transparency failure of German democracy promotion

Billions for NGOs: Why the state is suddenly stonewalling when it comes to our tax money

Citizens are held accountable, the state remains silent: The major scandal surrounding the democracy millions

The German federal government invests hundreds of millions of euros annually in so-called democracy promotion and the development of civil society structures. However, the public is apparently not meant to know the details of exactly who benefits from this generous taxpayer money. In response to parliamentary inquiries, the Finance Ministry tersely states that a complete list of the funded organizations would simply be too administratively burdensome. What at first glance appears to be a common bureaucratic hurdle turns out, upon closer inspection, to be a genuine constitutional scandal. While companies and citizens are required to account to the state for every aspect of their supply chains and finances, the government shields its extensive network of NGO funding from parliamentary oversight. This text sheds light on the systematic failure of transparency in German democracy promotion, exposes political hypocrisy, and demonstrates why this lack of government transparency fuels precisely the political disillusionment it is supposed to combat.

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The Federal Republic of Germany finds itself in a paradoxical situation: The very state programs financed in the name of democracy are denying the democratically legitimized parliament the transparency that is the essence of democratic budgeting. What began as a routine administrative question—who has been receiving taxpayer money for so-called democracy promotion for the past six years?—has developed into a symptomatic lesson in the state of the German understanding of the state. Federal Finance Minister Lars Klingbeil explained that providing complete information would simply be too time-consuming. Answering a parliamentary inquiry alone, considering some 7,000 individual grants from randomly selected agencies of the Interior Ministry, would require over 2,300 working hours. This response is not a minor administrative matter. It is a constitutional breach.

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The extent of state support for civil society

To understand the core of the debate, one must first grasp the financial dimension. The federal program "Democracy Live!" of the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth is by far the largest prevention program of the federal government. For the 2024 fiscal year, the budget legislature allocated €182 million for it, of which €171.8 million was actually disbursed. For 2025, the program volume was increased to €200 million, and the draft budget for 2026 even includes €209 million for "Democracy Live!".

But that's just a fraction of the overall picture. In the draft 2026 federal budget, the responsible ministry's individual plan allocates €332.1 million for "strengthening civil society" alone – an increase of 8.4 percent compared to the previous year. Virtually every federal ministry maintains its own funding programs for NGOs, counseling centers, and educational institutions. Since 2015, when "Democracy Live!" started with an annual budget of just €40.5 million, the budget for this one program has increased 4.5 times by 2024. This dynamic has occurred regardless of the budgetary situation, the economic climate, or the political majority – a striking demonstration of the institutional self-perpetuating nature of state subsidy systems.

To put this in perspective: More than €29 billion is earmarked for citizen's income and basic income support for job seekers alone in 2025, while the total budget of the Federal Ministry of Labor amounts to over €190 billion. Funding for civil society is quantitatively modest in comparison. However, its political significance lies not in the absolute figure, but in the qualitative question: Who receives the money, according to which criteria, and with what political impact?

Parliamentary control as a constitutional requirement

The Finance Minister's response—that a complete list of subsidy recipients is unavailable for administrative reasons—touches upon a fundamental pillar of the democratic order. Article 110 of the Basic Law unequivocally stipulates that all federal revenues and expenditures must be included in the budget. This provision is not a bureaucratic formality, but rather the core principle of the entire federal budget, as the Federal Constitutional Court has consistently affirmed in its jurisprudence.

The right to the budget is historically the oldest and most important power of parliamentary oversight of the executive branch. It is rooted in the medieval practice of the estates refusing to grant the monarch tax revenue if he failed to provide an account of his spending. Modern parliamentary democracy does not begin with the right to vote, but with the power to control the budget. When a government responds to parliamentary inquiries about budget expenditures by claiming the effort is too great, this is not an administrative problem – it is a challenge to the primacy of parliamentary oversight.

Furthermore, in fundamental rulings on the state financing of political actors, the Federal Constitutional Court has clarified that the process of democratic opinion formation must proceed from the people to the state organs, not the other way around. Interventions by state organs in this process are only compatible with the Basic Law if they are legitimized by specific constitutional grounds. This very principle comes into focus when the state finances organizations on a large scale that, in turn, attempt to shape political opinion formation.

The double standard: Companies are held liable, the state declares itself overwhelmed

Few aspects of this debate illustrate the structural imbalance as sharply as the comparison with the requirements of the Supply Chain Due Diligence Act. Since January 1, 2023, this law has obligated all companies with at least 3,000 employees in Germany, and since January 1, 2024, all companies with at least 1,000 employees, to maintain complete documentation of their entire value chain. Due diligence obligations include conducting regular risk analyses, implementing preventative measures, establishing complaint procedures, and fully documenting supply chain management. Even though recent reforms have eliminated the annual reporting requirement to the relevant authority, the internal documentation requirement remains unchanged. In the event of an audit, all documents must be available immediately and in full.

The irony of this situation is obvious: The same state that demands companies document the origin of their materials down to the last screw declares itself incapable of disclosing, within a reasonable timeframe, which organizations received taxpayer funds from which programs. This is data that must be present in government systems—otherwise, proper federal accounting would be impossible. Therefore, the argument of effort and complexity should not be understood as a technical problem, but rather as a political decision not to disclose certain information.

This asymmetrical transparency profoundly undermines the principle of equality in a state governed by the rule of law. Taxpaying citizens and businesses must document every payment, justify every expenditure, and record every supply chain. The backbone of this obligation is the threat of fines and, in cases of more serious offenses, criminal prosecution. The state apparently does not demand the same rigor from itself.

The political prelude: How coalition negotiations took place under a vow of secrecy

The dispute over NGO transparency has a history that further illustrates the scale of the problem. In February 2025, shortly after the federal elections, a parliamentary inquiry by the CDU/CSU parliamentary group, containing 551 individual questions about the financing of non-governmental organizations, caused considerable political uproar. At the time, Lars Klingbeil, then an opposition politician, accused the CDU/CSU of "foul play" and declared that the inquiry was putting organizations that championed democracy in the dock.

Even more far-reaching was what transpired immediately beforehand: According to multiple reports, the commencement of coalition negotiations between the CDU/CSU and the SPD was made contingent on the Union withdrawing its list of questions regarding NGO funding. Forbidding a potential coalition partner from requesting information as a precondition for government talks is unprecedented in the history of the Federal Republic. It illustrates that the interest in a lack of transparency is not rooted in bureaucratic overload, but rather in political calculation.

The CDU withdrew its list of questions and has since adhered to this self-imposed code of silence. It is the AfD that, as the only opposition party, continues to submit parliamentary inquiries and insist on answers. The fact that it is precisely this party that is tasked with enforcing the constitutionally mandated parliamentary right is a peculiar turn in the history of the Federal Republic.

Structural conflicts of interest and the NGO complex

Beyond its constitutional dimension, the structural entanglement between governing parties and the civil society they support warrants a sober economic analysis. State-funded organizations develop a strong institutional self-interest over time in securing continued funding. They become lobbyists for their own interests. Simultaneously, close personal and substantive ties emerge between ministries and NGOs – a constellation described in political science as the "iron triangle": government agencies, interest groups, and parliamentary committees form an impenetrable web of vested interests that systematically resists independent scrutiny.

According to the Bundestag, in 2024 the federal government funded approximately 530 non-governmental organizations based or active in Germany, either directly or through majority-owned federal companies. This figure only includes direct grants reported in the budget. It does not include indirect funding via federal programs such as "Democracy Live!", the Federal Agency for Civic Education, the GIZ (German Society for International Cooperation), or state and local authorities with federal participation – as an example of a Freedom of Information Act (FOIA) request to the Federal Ministry of Finance demonstrates.

From an economic perspective, this creates a classic principal-agent problem: The principal – i.e., taxpayers and parliament – ​​can hardly monitor the behavior of the agent – ​​ministries and funded organizations – due to a lack of information transparency. Without full disclosure, it is impossible to evaluate the effectiveness of the funds used, to identify double funding, or to correct biases caused by political affiliations.

Trust as an exhaustible resource

The macroeconomic significance of political trust is increasingly understood as an independent variable in welfare economics. Societies with high institutional trust exhibit lower transaction costs, mobilize civil society engagement more efficiently, and stabilize political systems even in times of crisis. For years, the measurement of this trust in Germany has painted a worrying picture.

According to the Körber Foundation's study "Democracy in Crisis 2025," 53 percent of eligible voters have little or no trust in democracy. Only one in ten reports having very high or high levels of trust in political parties. The German federal government and parliament face a significant deficit of trust. The Germany Monitor finds that 71 percent of the population views the development of democracy over the past ten years rather negatively. The main reasons cited are a lack of transparency, a declining base of trust, and the increasing polarization of political debates.

These data are not an abstract snapshot of public sentiment. They describe an erosion of the social cohesion upon which functioning democracies are based. When citizens develop the feeling that the political class applies double standards – strict requirements for everyone, but a refusal to provide information in their own self-interest – this is a rational starting point for political distrust, not irrational susceptibility to populism.

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The social democratic contradiction: A party that has lost its core

The deeper political dimension of the debate concerns the structural crisis of the SPD. The Social Democrats suffered a historically poor result in the 2025 federal election. Among blue-collar workers – the party's traditional core constituency – only 12 percent voted for the SPD. The AfD came in first in this group with 38 percent, followed by the CDU/CSU with 22 percent. The current figures are even more dire: According to an analysis by the Forsa polling institute from November 2025, only 9 percent of blue-collar and unemployed voters would choose the SPD.

What became particularly evident in Baden-Württemberg after the 2026 state election was that the SPD only garnered around five percent of the vote, while the AfD rose to 37 percent among blue-collar workers. At the same time, the progressive academic elite, who identify with identity politics, are increasingly migrating to the Greens. Consequently, the SPD is losing ground on both fronts: to the AfD, those voters who prioritize issues of economic security and social order, and to the Greens, those who favor culture war issues.

In economic terms, market research describes a classic process of market positioning: A party that no longer appeals to its core constituency can either reposition its platform or lose market relevance. The SPD has so far chosen a third option: It is ignoring market signals. Its defense of an extensive network of NGO funding sources that have little to do with the everyday concerns of the working class is an expression of this self-alienation.

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Promoting democracy: between legitimation and instrumentalization

It would be analytically dishonest to discredit the entire sector of state-funded civil society. Promoting democracy has a legitimate function: societies need structures for political education, for strengthening democratic participation, for preventing extremism, and for addressing social conflicts. The "Living Democracy!" program, in its third funding period starting in 2025, supports around 580 projects, and many of these are likely to demonstrate their genuine societal value.

The problem, however, is not the existence of such programs, but the lack of robust quality assurance and accountability mechanisms. Without complete transparency regarding recipients, use of funds, and measurable impact indicators, an evidence-based evaluation is impossible. In response to a parliamentary inquiry from the AfD, the German Bundestag referred to previously provided answers instead of offering a current, consolidated overview. This practice of providing fragmented and cross-referencing information is the institutional antithesis of transparency.

Furthermore, there is a systemic risk known in technical terminology as "regulatory capture": regulatory authorities or funding bodies compromise their independence through close relationships with the regulated or funded actors. When ministries collaborate closely with certain NGOs for years, share networks, and exchange staff, maintaining a critical distance for effectiveness evaluation becomes structurally difficult.

Digital age and data management: The technical excuse

The justification that providing information on 7,000 individual grants would require 2,300 working hours hardly stands up to scrutiny. That would amount to an average of 20 minutes of processing time per individual grant. In modern administrative law, the digital recording of grants, recipients, and purposes is not optional, but a legal obligation. The Federal Budget Code, grant law, and the administrative regulations pertaining to the Federal Budget Code mandate detailed documentation of every grant award.

The federal budget, published digitally at bundeshaushalt.de, categorizes expenditures into individual budget lines, chapters, and budget items. The granular level—which organization received which amount from which budget item—is recorded in the master data of the federal budget information systems. The fact that this data cannot be accessed in a structured format would represent a fundamental failure of the digitization of the federal budget. The fact that accessing this data is theoretically possible but would take weeks, however, indicates a deficient data infrastructure—a failure of administrative modernization in its own right.

The Federal Freedom of Information Act (FOIA) generally grants every citizen the right to request information from federal authorities. The fact that parliament, which approves the state budget, has more difficulty obtaining information about its use than an individual citizen through FOIA requests illustrates a distorted world of democratic accountability.

Institutional trust and its economic consequences

The transparency failure described is not merely a problem of democratic theory. It has measurable economic consequences. Institutional trust is a form of social capital that reduces transaction costs in a society, enables voluntary cooperation, and generates political stability, which in turn creates investment security. Germany is currently suffering from significant weaknesses as a business location: The bureaucratic burden on companies is among the highest in the OECD, the shortage of skilled workers is worsening, and trust in the government's ability to act is eroding.

According to a survey by the Foundation for Future Studies, only 37 percent of German citizens are optimistic about the future. Nearly eight out of ten respondents perceive a sense of alienation from political decision-makers, with a lack of transparency considered the primary cause. According to the Cologne Institute for Economic Research (IW Köln), transparent decision-making processes are essential for strengthening trust. When the state treats transparency as an imposition, it exacerbates the very crisis of trust whose symptoms it attempts to address with democracy promotion programs – a structural paradox.

This loss of trust is also reflected in the growing openness to anti-democratic alternatives. The Germany Monitor 2025 shows that nationwide, around 21 percent of the population is at least partially open to authoritarian worldviews; in East Germany, this figure rises to one in four. This is not a result of insufficient state support for democracy – it is a result of political disillusionment fueled by experiences of state arbitrariness, unequal treatment, and a lack of transparency.

What transparency would cost – and what it could save

A complete, digital, and up-to-date database of all government grants to civil society organizations is technically feasible and has long been a reality in other countries. The British Government Grants Information System, the US-based USAspending.gov, and the Austrian transparency portal demonstrate that budget data can be made available in machine-readable form without creating disproportionate administrative burdens.

The costs of such a transparency database would be negligible compared to the volume of funding received. The societal benefits, however, would be considerable: Politically, a publicly accessible funding database would either confirm or refute suspicions of the political instrumentalization of civil society funding. Scientifically, it would enable evidence-based impact research. And democratically, it would address the public's distrust – or at least that portion stemming from justified lack of transparency.

The refusal to take this path is therefore an explicit decision against gaining legitimacy through openness. It fuels the suspicion that the real goal is not to strengthen democracy, but to cultivate a political ecosystem that stabilizes certain worldviews and interpretive frameworks with public funds.

Market failure, state failure, and the limits of state democratic policy

From an ordoliberal perspective, a fundamental question arises: Can the state produce democratic culture by financing civil society? The answer from classical welfare economics would be skeptical: State production of cultural goods is susceptible to political distortion, inhibits the spontaneous emergence of societal preferences, and creates dependencies that undermine the desired autonomy of the supported actors.

Democratic engagement does not arise from top-down funding, but from societal conditions that enable people to participate meaningfully in their community. These include economic security, equal opportunities, a functioning public sphere, and the experience that state institutions act reliably, fairly, and accountably. None of these elements are produced by subsidies to NGOs. Many of them are actively weakened by the transparency failures described above.

This does not mean that state funding of civil society organizations should be rejected in general. It means that such funding must be subject to strict conditions: full public accountability for the use of funds, proven effectiveness, political neutrality as defined by the jurisprudence of the Federal Constitutional Court, and a transparent allocation process that makes funding equally accessible to all social groups.

Transparency is not a threat to democracy – its denial is

The refusal to provide full information about the use of tax revenue for promoting democracy is not an isolated incident. It is a symptom of a state culture in which parliamentary oversight is perceived as a bothersome obstacle, in which political networks develop vested interests that shield them from public scrutiny, and in which the principle prevails: What we finance must not be questioned.

The only democratic response to this culture can be transparency. Not as a political weapon that benefits or harms a party, but as a fundamental principle of the rule of law and fiscal management. Those who collect taxes must be able to explain where the money goes. This demand is neither right nor left. It is simply the minimum requirement for democratic legitimacy.

That such a self-evident principle is considered politically controversial in Germany in 2026 says more about the state of democratic debate than about the concerns of those demanding transparency. The greatest threat to democracy is not the disclosure of its financing structures. The greatest threat is when those who act in the name of democracy attempt to evade its control.