Money in Established Democracies: Explaining the Variation in Party Funding Regimes

Abstract: This paper will deal with why party funding regimes in established democracies differ. It examines the variation of funding in two ways: the new trend towards more public funding and the growing tendency for state intervention in party finance regulations. By using new, comprehensive data, it is hoped to contribute to the field of political finance. The data set is used with a large-n research strategy with a cross-sectional design on up to eighty-nine democracies. The empirical findings in this paper will demonstrate that the structure of the party funding regimes i.e. a country’s source of funding and its regulation to some extent depend on the electoral system and the political system. The result will show that when a country’s democratic institutional arrangement are characterized by a proportional electoral system with a presidential form of government it is more likely that it will use public funding as a source of money to political parties and have a higher amount of regulation on political finance. In addition, the age of democracy appears to have had some impact on source of funding but limited impact on the regulatory party funding regime.