Political constraints, public party funding, and the regulation of political finance: a global study

It has been suggested that the higher the political constraints, the greater the regulation of political finance. This is because, when parties operate in highly constrained contexts with numerous veto opportunities, there is more pressure to reach a consensus on reform. While public funding tends to be a positive-sum game conducive to the inclusive policymaking of constrained systems, political finance regulation tends to be a zero-sum game that can be stymied by veto players. We test these ideas using Lieberman’s nested analysis design. First, we run a series of logistic and OLS regression models on a global dataset, using IDEA’s indicator of public party funding and the Regulation of Political Finance Indicator (RoPFI) as dependent variables, and the index of political constraints (POLCON) as the independent variable. We find a strong association between public funding and political constraints, but no association between constraints and political finance regulation more generally. These findings are resistant to numerous robustness tests. We use the regression models to inform case selection for two plausibility probes of our main arguments. Our readings of the Netherlands and Botswana support the large-N analysis and are consistent with the different role political constraints play in public funding versus political finance regulation more generally. Our research has concrete implications for reformers and those advising them, and we make numerous contributions to political finance, party systems, and veto points literature.