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Daniela R. Piccio and Ingrid van Biezen

This chapter focuses on two core assumptions underlying the cartel party thesis: the increasing dependence of political parties on public subsidies and the penalizing effect of public funding regimes on smaller parties. Based on recent empirical evidence on the practices and the rules of public funding in European democracies we found corroboration of the cartel party thesis, in that public subsidies represent a substantial and increasingly large share of total party income in contemporary European democracies. We found mixed evidence instead for an underlying cartel model of regulation of political finance regimes, as the public funding rules have become more inclusive for smaller political actors and fairer mechanisms of electoral spending have been established over time.

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Vit Simral

In the fall of 1989, after years of political and economic crises, communist regimes in Czechoslovakia, Hungary, and Poland collapsed. Due to their common historical development, particularly during the Austrian Empire era, they are often treated as a specific region inside the Soviet bloc. After the regime change, in 1991, the countries confirmed their close ties formally by setting up the Visegrad Group and followed a common path that led them to accession to the European Union in 2004. The similar political development after 1989 has also been reflected in the area of political financing. Two factors, one internal and one external, significantly contributed to this similarity: first, as in all post-communist countries, political parties were being created from the top down and needed money for their activities and campaigning. With no ties to the civil society and virtually no membership, only small sums were collected from membership fees and private donations and parties had to turn to the state for financial support. Public funding schemes therefore became a hallmark of post-communist party systems, including the party systems of Czechoslovakia (since 1993, the Czech Republic and Slovakia), Hungary, and Poland. Second, the countries of the post-communist East Central Europe became members of the same international organizations, including the European Union and the Council of Europe. These supra-national bodies put considerable pressure on their post-communist member states to tackle corruption in their political systems. In 1999, Hungary, Poland, and Slovakia were among the first members of the Group of States against Corruption (GRECO), the Council of Europe’s anti-corruption monitoring body. The Czech Republic joined in 2002. Since then, the four countries, together with the remaining 45 GRECO members, have shared many anti-corruption standards, including standards on the transparency of political financing. This chapter presents the development of political finance and campaign funding regulations in the four individual countries in greater detail. While the history of the respective national party systems is briefly touched upon, the focus lies on the most recent developments and the current state of party funding regulation and practice in these countries. *This research was supported by the Czech Science Foundation, project No. 16-25570S “Political Financing in Central Europe on the National and the Sub-National Level”.

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Susan E. Scarrow

This chapter examines how political finance rules may be used to promote normatively-desirable patterns of political influence and participation. For instance, they may be used to reduce economically based political inequalities, or to protect citizens’ political privileges vis-à-vis other actors. The chapter uses data from International IDEA to illustrate how democracies employ such regulatory tools. Finally, it explores ways to measure how such rules affect financial participation in politics, considering experiences in the UK, Ireland and Canada.

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Victor Shale

It is axiomatic that the existence of political parties and their active participation is one of the key ingredients for representative democracy. The irony of the democratisation process is that, this notwithstanding, there is talk of building democracy without equally important discussion on how political parties can be capacitated by way of skills development and financing in order for them to contribute to the process. Where reference is made to political parties it is often about them and without their inputs. This chapter looks at political party financing in terms of the opportunities and challenges entailed in regulating party financing in Africa. Using the case studies of Lesotho and Mozambique, the chapter argues that while financing challenges are country specific, their causes are common to most countries. The chapter borrows from Hopkin’s mass party–cartel party models explanation of the causes of party financing problems including problems related to the regulation. This framework finds that party financing from the sources based on traditional political participation of the members of society has been attenuated by the emergence of new and often sophisticated forms of participation which have led to the emergence of cartel party systems which are highly dependent on state financing. The finding from Lesotho and Mozambique indicates that while public funding of parties is a good consociation mechanism, regulation and enforcement raises problems. The chapter contends that public funding of parties in these countries, and by extension elsewhere in the continent, has led to a proliferation of office-seeking parties instead of policy-seeking ones. Governing parties and coalitions remain dominant against enfeebled opposition parties. It therefore concludes that there is a need to put in place comprehensive regulations governing political parties’ activities as well as setting up of clear horizontal and vertical accounting mechanism for the public funds used for political party financing.

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Danielle May

Party funding regulations are often implemented with the main objective of improving flailing public trust in political institutions. This is not an easy task. It appears that citizens are uncomfortable with parties that are funded by special interests or public subventions yet are unwilling to contribute their own money as an alternative. How, then, can political finance legislators design the optimal regulations to regain citizen trust? First, we need to know whether different sources of party funding actually have an empirical effect on public opinion, and if so, in what direction. Despite common assumptions of a relationship between party funding and citizen trust, the link has not been adequately explored. This chapter posits that this might be due to a major shortcoming: by focusing on regulations, studies overestimate public knowledge of political finance. To counter this deficiency, the chapter focuses on party funding proportions. Even though citizens are largely unaware of particular regulations, they may have a general sense of how parties in their country generate money. Using multiple regression analysis, a relationship is established between trust in parliament, and three party revenue streams – public funding, private contributions and membership fees. The analysis is based on data from 1980 to 2014 in four countries: Denmark, the Netherlands, the UK and Germany. The findings suggest that public funding implemented with effective anti-cartelisation conditions improves public trust in political institutions.

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Maxime Pelletier

While the impacts of public funding to political parties have been studied extensively, the question of why public funding measures are adopted in the first place has attracted less attention from scholars. In this chapter, the predictions of two important contributions to this field will be evaluated in light of the Canadian case. In addition to those of the cartel theory, the propositions developed by Michael Koss in its monograph The Politics of Party Funding (2011) will be considered. Cartel theory and Koss’s arguments are quite different, but they have in common a focus on the role of cooperation between the major political parties in the introduction of some forms of public funding regime. However, as the present case shall demonstrate, cooperation is not a necessary condition for public funding to be significantly expanded or cut back. On the contrary, when veto points are minimal and the salience of the issue of public funding is high, Canadian political parties have shown a willingness to reform the party finance regime without securing a consensus on the issue and, at times, against their own financial interests. The chapter analyzes the main elements of the party finance reforms with a focus on the competitive effects of the changes and the position adopted by political actors each time the topic surfaced on the agenda. It then examines the factors which have allowed the reforms to take place despite a lack of consensus between the parties. The chapter concludes with what the study of the Canadian case may contribute to the theoretical knowledge of the adoption of public funding to political parties.

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Felix-Christopher von Nostitz and Giulia Sandri

The chapter outlines the cost and funding possibilities for party primaries. It especially focuses on how states might facilitate or hinder the use of party primary elections through either direct or indirect funding regulations. The chapter first outlines the different costs of primaries and how they can vary depending on the type of contest and the manner of its organization. The second part of the chapter outlines the regulatory environment and its consequences for intra-party democracy for the cases of Italy, the US, the UK and Germany. It shows that finance regulations are at the heart of determining if primaries are used or not and whether or not they positively affect intra-party democracy. The chapter demonstrates how the funding of primaries can have an impact on intra-party power distribution as it determines who has control over finance.

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Vicente Chua Reyes Jr

This chapter addresses one main question: in the face of 21st century challenges typified by population decline, rising income inequalities and a steadily growing clamour for political liberties, how does the historically dominant People’s Action Party (PAP) craftily negotiate a crisis narrative alongside electoral manipulation to consolidate its position? This chapter deliberately puts recurring crises narratives alongside political finance and party funding manipulation that are uniquely intertwined in the Singapore context. In interrogating this broad query, three specific questions are answered: (1) What are the features of a city-state, controlled by a hegemonic party, particularly in relation to its electoral processes? (2) What was the crisis and the remedy sought by the city-state? (3) How does the response to the recurring crisis reflect on the electoral processes, specifically the funding and campaigning arrangement? The concluding section provides an explanation as to how the dominant PAP uses a crisis narrative alongside electoral manipulation in order to consolidate and legitimize its role.