What drives Incumbent Parties to support Transparency in Party Finance? The case of Spain.

Dr. Alfonso Sánchez-Carrasco
Dr. Alberto Álvarez-Sotomayor

Party finance regulation is a way to level the playing field of electoral competition and preventing corruption. Research in this area has mainly analyzed party finance regulation as a variable that affects different aspects of the system. However, recent research suggests analyzing party finance laws as dependent variables. Based on Scarrow (2004), two set of interests have been discussed as drivers of regulation: the ‘revenue-maximizing’ logic and the ‘electoral economy’ one. Evidence from in-depth case studies has been provided without conclusive results. In this study, we use quantitative data to analyze the incumbent party’s willingness to reform party funding regulation. Three theoretically-driven factors are analyzed: (1) fluctuations experienced by the incumbent party in its own funding structure; (2) fluctuations in the economic competition between the incumbent party and the main opposition party; and (3) political leadership of the incumbent. We use exact logistic and Firth regressions to assess the impact of these factors on the reform of the party finance laws in Spain from 1987 to 2013. Our results indicate that the Spanish government’s willingness to support or initiate reform increases when: (1) economic competition rises; (2) the incumbent’s political leadership is under threat; and (3) there is a minority government.