Party subsidies and the freezing of party competition: Do cartel mechanisms work?

Abstract

The number of countries offering public subsidies to political parties has vastly increased in recent decades, but there have been few attempts to assess how these subsidies affect political competition. Expectations about their likely impact vary widely. Some have described subsidies as key devices used by so-called ‘cartel parties’ to buttress their status and exclude new challengers. Others see subsidies as incentives that encourage new party formation and sustain fledgling parties that otherwise might disappear. The research reported here investigates the circumstances under which subsidies seem more likely to play one or the other of these roles by considering the development of party systems and party subsidies in European democracies. It finds little evidence that subsidies freeze out new parties, but there are signs that certain schemes may encourage party fragmentation.

Acknowledgements

Thanks to Anna Mikulska for research help on this project, and to Jo Saglie and Andrew Appleton for help interpreting information on party subsidy regimes in Norway and France. The usual disclaimers apply.

Notes

1. Other tools with similar aims include providing indirect subsidies, such as free media access, and capping party expenditures to discourage political funding ‘arms races’.