This handbook provides a general description of the different models of political finance regulations and analyses the relationship between party funding and effective democracy. The most important part of the book is an extensive matrix on political finance laws and regulations for about 100 countries. Public funding regulations, ceilings on campaign expenditure, bans on foreign donations and enforcing an agency are some of the issues covered in the study. Includes regional studies and discusses how political funding can affect women and men differently, and the delicate issue of monitoring, control and enforcement of political finance laws.

On cover & title page: Integrated project "Making democratic institutions work"

The recent debate on the role of money in politics has shed the light on the challenges of political finance regulations. What are the risks associated with the funding of political parties and election campaigns? Why are existing regulatory models still insufficient to tackle those risks?

Efforts to reform the U.S. campaign finance system typically focus on the corrupting influence of large contributions. Yet, as Raymond J. La Raja and Brian F. Schaffner argue, reforms aimed at cutting the flow of money into politics have unintentionally favored candidates with extreme ideological agendas and, consequently, fostered political polarization. Drawing on data from 50 states and the U.S. Congress over 20 years, La Raja and Schaffner reveal that current rules allow wealthy ideological groups and donors to dominate the financing of political campaigns. In order to attract funding, candidates take uncompromising positions on key issues and, if elected, take their partisan views into the legislature. As a remedy, the authors propose that additional campaign money be channeled through party organizations—rather than directly to candidates—because these organizations tend to be less ideological than the activists who now provide the lion’s share of money to political candidates. Shifting campaign finance to parties would ease polarization by reducing the influence of “purist” donors with their rigid policy stances. La Raja and Schaffner conclude the book with policy recommendations for campaign finance in the United States. They are among the few non-libertarians who argue that less regulation, particularly for political parties, may in fact improve the democratic process.

This text covers political finance systems and direct state funding in Costa Rica and Uraguay as well as state funding and campaign finance practices in those countries.