Similar Challenges – Different Outcomes: Addressing the Supply and Demand
Sides of Party Funding Regulations in Post-Communist Space1
Sergiu Lipcean
European University Institute
[email protected]
Paper prepared for the presentation at the ECPR General Conference
Prague, 7-10 September, 2016
Work in progress,
Please do not cite without permission
1
This is not a self-standing paper. It is an empirical chapter of my PhD thesis
1
Table of contents
1. Operationalization of restrictiveness towards income limits ................................................................... 5
2. The development of legal framework on financing with respect to party regular activity .................. 8
2.1. General trends regarding restrictiveness of income from private sources for party daily activity
........................................................................................................................................................................... 8
2.2. Low restrictive cases............................................................................................................................. 12
2.3. Medium-high restrictive cases............................................................................................................. 13
2.4. High restrictive cases ............................................................................................................................ 18
2.5. Conclusion ............................................................................................................................................. 25
3.The development of legal framework on financing with respect to election campaigns ................... 26
3.1. General trends regarding restrictiveness of income from private sources for election
campaigns ...................................................................................................................................................... 26
3.2. Low restrictive cases............................................................................................................................. 30
3.3. Medium-low restrictive cases .............................................................................................................. 31
3.4. Medium-high restrictive cases............................................................................................................. 35
3.5. High restrictive cases ............................................................................................................................ 39
3.6. Conclusion ............................................................................................................................................. 49
2
List of tables:
Table 1: Frequency of cases spent by post – communist polities under different restrictiveness regimes
................................................................................................................................................................................. 10
Table 2: Magnitude of change in restrictiveness degree for party regular activity 1990/1991 –
2007/2012*............................................................................................................................................................ 11
Table 3: Maximum level of donations for physical and legal entities in countries belonging to mediumhigh and high restrictive PFR ............................................................................................................................. 16
Table 4: Summary statistics on donations from physical and legal entities for countries belonging to
medium-high restrictiveness type 2007-2012 (thousand $) ............................................................................ 17
Table 5: Summary statistics on donations from physical and legal entities for countries belonging to
high restrictiveness type 2010-2011 (thousand $)............................................................................................ 20
Table 6: The size of donors’ network for countries belonging to high restrictiveness type...................... 23
Table 7: Frequency of election campaigns spent by post – communist polities under different
restrictiveness regimes 1990 – 2012................................................................................................................... 27
Table 8: Magnitude of change in restrictiveness degree for party electoral activity 1990- 2011............... 28
Table 9: the maximum limits on campaign spending for candidates and parties in Hungary (US $) ...... 33
Table 10: Summary statistics on donations from physical and legal entities for countries belonging to
high restrictiveness type 2007-2011 (US $)....................................................................................................... 43
Table 11: The size of donors’ network for high restrictive cases .................................................................. 46
List of figures:
Figure 1: Typology of party funding regimes based on restrictiveness of private sources of income ....... 5
Figure 2: Restrictiveness of party financing regimes with respect to income limits for party regular
activity in post-communist polities 1990 – 1996................................................................................................ 9
Figure 3: Restrictiveness of party financing regimes with respect to income limits for party regular
activity in post-communist polities 2007 – 2011.............................................................................................. 10
Figure 4: Timing of switching to more restrictive regimes and duration ..................................................... 12
Figure 5: Frequency of cases under a low restrictive regime by country 1990-2012 .................................. 13
Figure 6: Frequency of cases under a medium-high restrictive regime by country 1990-2012................. 14
Figure 7: Maximum levels on donations from physical and legal persons for medium-high restrictive
regimes 1994 – 1997 (in US $ thousand). ......................................................................................................... 15
Figure 8: Maximum levels of donations from physical and legal entities for medium-high restrictive
cases 2007-2012 (US $ thousand)....................................................................................................................... 17
Figure 9: Frequency of cases under a high restrictive regime by country 1990-2011................................. 18
Figure 10: Limits on donations from physical and legal entities for countries belonging to high
restrictiveness type 2010-2011 ............................................................................................................................ 21
3
Figure 11: Overtime distribution of restrictiveness regimes for party regular activity 1990 – 2012 ....... 26
Figure 12: Restrictiveness of party financing regimes with respect to income limits for election
campaigns 1990 – 1996........................................................................................................................................ 27
Figure 13: Restrictiveness of party financing regimes with respect to income limits for election
campaigns 2007 – 2011........................................................................................................................................ 28
Figure 14: Timing and pace of change between different election financing regimes in post-communist
space 1990-2012.................................................................................................................................................... 29
Figure 15: Frequency of cases under a low restrictive regime for election financing by country 19902012 ........................................................................................................................................................................ 31
Figure 16: Frequency of cases under a medium-low restrictive regime for election financing by country
1990-2012............................................................................................................................................................... 32
Figure 17: Frequency of cases under a medium-high restrictive regime for election financing by country
1990-2012............................................................................................................................................................... 35
Figure 18: Maximum levels of donations on physical and legal persons during election campaigns for
medium-high restrictiveness cases ..................................................................................................................... 37
Figure 19: Maximum donation levels from physical entities for high restrictive cases 2007-2011 (US $)
................................................................................................................................................................................. 43
Figure 20: Maximum donation levels from legal entities for high restrictive cases 2007-2011 (US $) .... 44
Figure 21: The relationship between the size of donors’ network and the size of electoral market ........ 47
Figure 22: The relationship between the size of donors’ network and the size of electoral market
(without Moldova and Russia)............................................................................................................................ 47
Figure 23: Overtime distribution of restrictiveness regimes for party regular activity 1990 – 2012 ....... 50
4
1. Operationalization of restrictiveness towards income limits
In this chapter I investigate the restrictiveness of party and campaign income amassed from
private sources relying on the analytical framework exposed in the second chapter. The underlying idea
based on which I conceive restrictiveness is linked to fundraising endeavors of political parties. As already
noticed, a given PFR becomes more restrictive as political parties have to deploy more efforts in amassing
income from private sources. The emphasis falls on income limits imposed on donations from different
sources like physical and/or legal persons and aggregate limits on party/campaign income. Hence, the
restrictiveness of income from private sources stems from crossing these two legal indicators. Figure 1
graphically depicts this typology.
Figure 1: Typology of party funding regimes based on restrictiveness of private sources
of income
Caps on individual contributions
Caps on aggregate income
No
Yes
No
Low
Medium-low
Yes
Medium-high
High
As result of crossing, we obtain four configurations of restrictiveness ranging from a low to a
high degree with two intermediate types. Any PFR that envisages limits neither on contributions from a
single entity nor on aggregate income records a low restrictiveness score. On the contrary, any PFR that
envisages limits on both types of caps records a high restrictiveness score. A medium-low score is
assigned to those financing regimes that foresee limits for aggregate income but do not institute caps on
private contributions. Finally, a medium-high score is assigned to those regimes that envisage limits on
donations but do not set up limits on the aggregate party/campaign income.
5
Within this framework, however, there are instances of extreme cases belonging to the high
restrictive type. This kind of restrictiveness embodiment can emerge in two different situations. The first
occurrence emerges when political opposition is completely banned, that is, legal framework doesn’t
allow the registration and operation of alternative political parties. The second occurrence unfolds when
private actors are banned from contribute to any electoral competitor altogether. In former communist
polities such cases are found in several authoritarian regimes. 2
I use this framework to scrutinize financing regulations for both party regular activity and election
campaigning. This is a necessary and pertinent separation due to national differences related to the
duration of election campaigns that affect party fundraising and spending strategies. Therefore, by
investigating both regular and campaign funding regulations allows capturing the fullness of regulatory
regime. For instance if a given PRF is mainly focused on election campaign while leaving uncovered
regular funding, then a large part of party finances would remain completely unaccountable in many
respects. In the broadest sense, every party financial activity can be regarded as “money for
electioneering” (Pinto-Duschinsky, 2002, p. 70) regardless of the time frame, although the intensity of
electoral competition makes the use of money much more visible during elections. Consequently, it
doesn’t come as a surprise that electoral rules much more densely regulate the behaviour of electoral
contenders regarding their finances. Nevertheless, controlling the sources of money and how it is spent
by parties throughout their regular operation is not of a lesser importance. When the boundaries between
election and non-election periods are blurred, parties have at their disposal more opportunities to avoid
compliance by concealing not only the source of money but also its manipulation between election and
non-election cycles.
Hence, by analysing PFR relying on this division offers the possibility to look at the way how
financing regulations for party daily activity and electioneering are intertwined. This framework also
offers the advantage of investigating the incentive structure that regulatory framework lays down for
political parties. By incentive structure I imply here the manoeuvring room available to political parties
in designing their fundraising strategies. As already mentioned, a given PFR is considered more
permissive if it does not require much efforts to be deployed in collecting financial resources.
Resorting to this guideline, below I provide some considerations on how to operationalize
restrictiveness beyond the mere assignment of cases to one or another restrictiveness type. The
assignment of cases to different restrictiveness types does not tell us, however, much on how to compare
cases when they belong to the same type. It might well be the case that many PFR could share the same
properties, but still exhibiting high variation within the same type. Three out of four types display such a
possibility.
2
I will discuss this type in more details while performing empirical analysis of post-communist polities.
6
Bearing in mind that my benchmark is the easiness whereby parties amass resources, the dividing
line is drawn between those PFR that envisage and do not envisage caps on private contributions. In our
case, low and medium-low restrictive regimes share this property. Since there are no legally binding
quantitative restrictions on the amount a single entity is authorized to contribute to party coffers it is
relatively easy for parties to collect money, provided that they are capable to access the pool of affluent
donors. The only restriction is the payment capacity of a donor and his/her willingness to contribute.
Therefore, such financing regimes are the most prone to so called plutocratic financing (Koole & Gidlung,
2001; Nassmacher, 2001; Pinto-Duschinsky, 1989).
Low restrictive regime does not require any specific operationalization because it depicts a regime
with no legally prescribed restrictions. Under the medium-low restrictive type the operationalization
yardstick that allows comparing PFR restrictiveness is epitomized by the upper limit on party/campaign
income. The larger the amount of financial resources political parties are entitled to accrue, the more
permissive a funding regime is meant to be. Notwithstanding, this does not affect substantively the efforts
parties have to carry out in their fundraising. It is legally admissible that a single resourceful contributor
could bear the entire cost of financing. The occurrence of such an outcome is highly improbable in an
ordinary situation but from a legal perspective it is feasible and analytically relevant.
On the other side of the dividing line there are other two types that record higher restrictiveness
values due to the presence of contribution limits set up by the regulatory framework. Under these
conditions parties have to deploy more endeavours in order to collect the necessary resources for their
operation. Overall, the relationship between contribution limits and restrictiveness hinges on the
donation’s value from a single entity. The larger the amount a single donor is entitled to contribute to
party/campaign financing the less restrictive a PFR becomes and vice versa. The logic is that even under
the presence of contribution limits, provided they are permissive, parties are not required to struggle too
much so as to fill up their war chests. On the contrary, when the upper threshold on donations is fixed
at low values, it is more likely to be associated with more constraining regimes due to greater efforts
needed to be deployed so as to reach a broader pool of sponsors. Under these conditions lower caps on
private contributions are much closer linked to grassroots financing strategies. Nevertheless, as will be shown
throughout empirical analysis, it need not always be the case that donation caps, by default, entail a highly
restrictive PFR.
Given the fact that medium-high and high restrictive types are differentiated only by the presence
of an upper annual/campaign limit (which is a significant additional restriction), but share the same
feature of capping donation limits, their operationalization is slightly different. Both types however offer
the possibility to explore the variation when many cases would fall within the same type.
For the medium-high regimes the indicator that allows comparing similar cases is simply
represented by the value of contribution limits itself. As already pointed out, high thresholds on
7
donations would involve fewer efforts to accrue financial resources and, therefore, would be associated
with a less restrictive PFR. The opposite holds for low thresholds on contribution limits.
The high restrictive type offers even a better way to operationalize restrictiveness and compare
cases that belong to it. Knowing the value for a single donation and the value for the total income it is
possible to construct an index that would reflect the extensiveness of donors’ network. This index is
obtained by dividing the value of the upper limit on total campaign income as foreseen by law to the
maximum value of a single contribution. The result represents the minimum number of donors that are
necessary to reach the limit. The number of donors accounts here for the size of donors’ network and
implicitly for the restrictiveness degree. The greater the number of sponsors needed to reach the
aggregate income limit, the more constraining a PFR becomes since parties are compelled to strive harder
to reach the limit. Vice versa, the lower the number of donors indispensable to reach the upper limit of
the aggregate income, the less constraining are the rules on donations since the efforts undertaken by any
party or candidate to reach the maximum limit are less demanding.
In the light of these considerations, in the next paragraph I turn to the analysis of regulatory
arrangements of party financing in post-communist polities and their development over time.
2. The development of legal framework on financing with respect to party regular
activity
2.1. General trends regarding restrictiveness of income from private sources for party
daily activity
In this paragraph I address two issues related to the development of PFR in post-communist
polities – cross-country and overtime variation in the restrictiveness degree for party non-election activity.
PFR in post-communist space illustrate an interesting paradox regarding their restrictiveness.
While displaying a considerable degree of variation they still resembled each other in one respect – the
direction of restrictiveness. The majority of these financing regimes moved from the lack or very lax
rules, pertaining to donation limits and caps on aggregate income, to quite complex regulatory regimes.
In many cases, besides quantitative restrictions, i.e. how much money can be raised, these regimes also
provided for some qualitative restrictions, that is, money coming from a certain source like party property
or anonymous donations (when they were allowed) could not exceed a certain share out of the total
income.
At the onset of transition, few countries imposed constraints on party regular activity. While there
was a motivated concern towards imposing restrictions on certain income sources, little attention was
given to capping income from those who were authorized to give out, or to limit the total amount one
could raise. Unlike the regulatory framework pertaining to the electoral competition, the regulation of
private income sources for party daily activity received little attention. This should not be surprising given
the autocratic past and the emergence of pluralistic politics via competitive elections.
8
Figure 2: Restrictiveness of party financing regimes with respect to income limits for
party regular activity in post-communist polities 1990 – 1996
Source: Author’s own elaboration
Note: High-extreme – political opposition is banned or private contributions are prohibited altogether; High - limits on
contributions from physical and legal persons & and limits on total annual income; Medium-high - only limits on contributions
from physical and legal persons; Medium-low - only limits on total annual income; Low - no limits.
Figure 2 illustrates the state of affairs pertaining to the restrictiveness of PFR when former
communist countries embarked on democratization process.
Except few cases discussed above, during the first decade of transition the majority of postcommunist polities did not alter their rules regarding donations and limits on total income. They followed
suit only at later stages by revising existing regulatory framework or enacting brand new legislation on
party funding. Figure 3 captures the state of affairs for each country at the moment of GRECO evaluation
of thier PFR.3 As one can notice, there is a quite percievable shift from the low restrictiveness type
towards more constraining PFR. Nevertheless, as this map shows, CEE and FSU polities can be diveded
in two categories. The first category includes countries that have not altered their PFR regarding income
limits for party regular activity, while the second category includes those that moved from a low restrictive
regime towards more restrictive regulations.
For those post-communist countries that are not GRECO members like Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan
data reflect their regulatory regimes as of 2011 except Turkmenistan for which the data reflects the regulations adopted in
2012.
3
9
Figure 3: Restrictiveness of party financing regimes with respect to income limits for
party regular activity in post-communist polities 2007 – 2011.
Source: Author’s own elaboration
Note: High - limits on contributions from physical and legal persons & and limits on total annual income; Medium-high only limits on contributions from physical and legal persons; Medium-low - only limits on total annual income; Low - no
limits.
Yet, the shift towards more restrictive rules occurred slowly and in the majority of cases quite
late. This can be inferred from the table 1 which indicates the frequency of cases spent under different
restrictiveness regimes since the onset of transition till GRECO evaluation. One country year spent under
a certain restrictiveness regime represents here one case and the table 1 indicates the total number of
cases for all post-communist regimes for roughly 20 years.
Overall, there is a clear prevalence of low restrictive regimes troughtout two decades of transition.
In approximately two thrids of all cases political parties proved to be almost completely unconstrained
with regard to the way how they amassed financial means from private sources. The restrictivenees of
funding regimes under the lack of contribution limits sprang only from the range of banned sources.
Notwithstanding, the lack of donation caps and ceilings on aggregate income still allowed political parties
to ofset the restrictions placed on banned sources by extracting unlimited resources from the authorized
ones.
Table 1: Frequency of cases spent by post – communist polities under different
restrictiveness regimes
Restrictiveness degree
Number of cases Percentage of cases Cumulative percentage
Low
386
68.56
68.56
Medium-low
4
0.71
69.27
Medium-high
111
19.72
88.99
High
41
7.28
96.27
Extreme-high*
21
3.73
100
Total
563
100
Source: Author’s own calculations
Note: Extreme-high restrictive regime exemplifes an extreme value of high type given the full ban on income from private
sources and is usually present in authoriatarian regimes. For this reson I present it separately but it does not constitute a
distinct restrictive regime.
10
Only in one fifth of all cases political parties have been subject to legal constraints in accumulating
money from private donors via contribution caps and only in seven percent of cases they faced
restrictions on both private contributions and total income.
Table 1 doesn’t reveal, however, the magnitude and timing of change. The magnitude of change
captures the alteration in restrictiveness degree from the beginning of transition until the GRECO
evaluation. The maximum change that ranges from the low to the high restrictiveness degree implies
three units of change. The timing, on the other hand, reveals the moment of switching from less
constraining to more constraining rules. Table 2 presents this change for all post-communist regimes. It
shows that 12 countries did not experience any change in the restrictiveness degree, 10 placed only limits
on donations and 5 imposed both kinds of caps, i.e. on donations and on the total annual income.
Table 2: Magnitude of change in restrictiveness degree for party regular activity
1990/1991 – 2007/2012*
Magnitude of change
Number of countries
Percentage
-2
1
3.57
0
12
42.86
2
10
35.71
3
5
17.86
Total
28
100
Source: Author’s own calculations
Note: For the Former soviet republics I take 1991 as the lowest time limit while for other post-communist regimes of Central
Eastern and South Eastern Europe the lowest time limit is 1990. The upper time limit varies for each country conditional on
the GRECO evaluation. For Central Asian Republics which are outside GRECO evaluation scheme the upper time limit is
2011 except Turkmenistan for which it is 2012.
Finally, timing of switching towards more restrictive regimes is a crucial factor in regulating party
finances. From this perspective, post-communist polities turned out to be quite reluctant in restricting
money flows during early ’90. This can be seen from Figure 4 that presents sixteen polities that performed
regulatory changes, thus shifting to more restrictive PFR. It displays both the moment of introducing
restrictions on contribution limits and/or aggregate income and the endurance of adopted PFR until the
upper time limit examined here. As one may notice, besides the variation regarding the timing of enacting
more restrictive rules, the common feature displayed by all these cases is the preserving of these rules
over time intact.
11
BGR
BIH
GEO
HRV
LTU
LVA
MDA
MKD
MNE
POL
ROU
RUS
SRB
SVN
TKM
UZB
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Ex
Ex
Ex
Ex
M Me
M Me
M Me
M Me
tre
tre
tre
tre
ed d
ed d
ed d
ed d
m
m
m
m
iu ium
iu ium
iu ium
iu ium
m - H em - H em - H em - H e-lo hi i hi
-lo hi i hi
-lo hi i hi
-lo hi i hi
g
g
g
g
g
g
g
g
g
g
w h h h
w h h h
w h h h
w h gh gh
Restrictiveness degree
Figure 4: Timing of switching to more restrictive regimes and duration
Source: Author’s own elaboration
All countries depicted in figure 4, except Montenegro, jumped from a low to medium-high or
high restrictive regimes in one stride. Montenegro, instead, needed two steps to reach the high level of
restrictiveness.
I turn now to a more detailed analysis of each restrictiveness type by scrutinizing more carefully
the evolution of individual cases which are representative for every type.
2.2. Low restrictive cases
Cases belonging to this restrictiveness regimes feature no legal constraints either on
contribution limits from physical and/or legal entities or limits on aggregate income collected from
these contributions. Therefore the only relevant dimension to look at is the length of their stay under a
financing regime with no constraints. Figure 5 eloquently illustrates cross-country variation in this
regard.4 Almost half of post-communist polities, including Albania, Armenia, Azerbaijan, Belarus,
Czech Republic, Estonia, Hungary, Kazakhstan, Kyrgyzstan, Slovakia, Tajikistan, and Ukraine remained
encapsulated into a low restrictiveness regime for the entire period examined here. They are followed
by the second group of countries that at least for one decade did not place, alike, any limits on party
fundraising. Moldova and Croatia head this group with 16 years spend under the lack of restrictions
with Russia and Bulgaria closing it with 10 and 11 years respectively.
4
Frequency of cases is represented by the number of years.
12
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
BIH
LVA
MKD
SVN
GEO
ROU
LTU
RUS
BGR
POL
SRB
UZB
MNE
HRV
MDA
ALB
SVK
ARM
AZE
BLR
KGZ
TJK
CZE
EST
HUN
UKR
KAZ
Frequency of cases
Figure 5: Frequency of cases under a low restrictive regime by country 1990-2012
Source: Author’s own elaboration
Finally, the last group is represented by those countries which first introduced legal restrictions
on income, thus they spent much less time under a low restrictive PFR. Slovenia, Macedonia and Latvia
were the first who introduced donation caps between 1994-1995 shortly afterwards followed by
Romania and Georgia.
2.3. Medium-high restrictive cases
Medium-high restrictive cases feature the presence of annual donation caps on physical and/or
legal entities. At the outset of transition only few countries imposed restrictions on the amount a single
donor would contribute to party pocket. During the first decade of transition only five countries imposed
such legal restrictions – Macedonia, Slovenia, Latvia, Romania and Georgia. Similar to low restrictive
cases, figure 6 shows the total number of years each country spent under medium-high restrictive
regimes.5
Romania is not presented in figure 5 since it also imposed limits on the annual total income parties could amass from
private contributions.
5
13
Figure 6: Frequency of cases under a medium-high restrictive regime by country 1990-2012
16
15
Frequency of cases
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
TKM HRV UZB POL BGR LTU
BIH GEO SVN LVA MKD
Source: Author’s own elaboration
Slovenia’s introduced limits on campaign contributions already in its electoral legislation in 1990
(Toplak, 2007, p. 171). Slovenian Party Law enacted in 1994 applied the same requirements to both
physical and legal persons by capping the annual maximum contributions to 10 average monthly wages
(AMW) (Art. 22).6 Macedonia’s Law on Political Parties passed in 1994 applied similarly equal restrictions
to physical and legal entities by setting up an upper limit at 100 AMW annually. For the election
campaigns however this limit was doubled, thus allowing individuals and businesses to donate up to 200
AMW (Art. 30).7 Latvia followed suit in 1995 by fixing the upper limit on annual donations at 25
thousand Lats for both individuals and companies (Art.4). 8 Only Georgia set up different limits for
physical and legal entities. The new party law enacted in 1997 fixed the upper annual limit on donations
at 30 thousand and 100 thousand Lari for physical and legal entities respectively.9
Despite of their belonging to the same restrictiveness type, one may still notice a variation
stemming from different levels on contribution limits. Figure 7 depicts this variation among the former
communist regimes belonging to the medium-high during the first decade of transition.10
Political Parties Act - ZpolS (Official Gazette of the RS, no. 62/94 dated 7 October 2004), retrieved from
www.partylaw.leidenuniv.nl
7 Law on Political Parties (Official Gazette of the Republic of Macedonia no. 41/94), retrieved from
https://web.archive.org/web/20041012230714/http://www.mlrc.org.mk/law/l015.htm
8 Law on Financing of Political Parties, retrieved from www.partylaw.leidenuniv.nl
9 Органический закон Грузии “О политических объединениях граждан” No. 1028, 31/10/1997, Парламентские
ведомости, 45, 21/11/1997.
10 The values for individual and corporate donations are obtained by multiplying the number of monthly wages, according
to the law, to (BY) the wage value in the year of law enactment. The result is then divided by exchange rate of national
6
14
Figure 7: Maximum levels on donations from physical and legal persons for mediumhigh restrictive regimes 1994 – 1997 (in US $ thousand).
79.4
Thousand US $
80
60
47.4 47.4
40
23.1
17.9517.95
20
12.2
4.66 4.66
2.4
0
Georgia
Latvia
Macedonia
Romania*
Physical entities
Slovenia
Legal entities
Source: Author’s own elaboration
Note: Romania belongs to the high restrictive regime
As figure 7 reveals, there is a large variance even among cases that belong to the same
restrictiveness type. Georgia leads the top by having set up the maximum level on donations from legal
entities at the equivalent of almost US $ 80 thousand. Slovenia, on the other hand, closes this top fixing
the maximum level of donations at roughly 4.7 thousand US $ which is about 17 times less than Georgia’s
maximum levels.
The pool of post-communist regimes imposing restrictions on income from private sources
started to enlarge around 2000. In this respect they can be divided in two groups. The first group refers
to countries that shifted from the low to the medium-high restrictiveness type and encompasses Bosnia
& Herzegovina, Bulgaria, Croatia, Poland, Uzbekistan, and Lithuania. The second group concerns polities
that switched from the low to the high restrictiveness degree and includes Romania, Russia, Serbia,
Moldova and Montenegro. Although there is a difference in the restrictiveness degree between the two
groups, they share the same property – limits on private contributions.
Table 3 presents the full range of regulatory changes since the introduction of donation limits
with subsequent amendments for all ex-communist regimes belonging to medium-high and high
restrictive regimes.11 Data on contribution limits, as depicted in table 3, do not indicate clearly the
currency to US $. Data on wages and exchange rates are taken from National Statistical Offices and National Banks of each
country respectively.
11 If a country records a single observation then the upper level of donation remained unchanged over time. Conversely,
every additional observation implies changes regarding the maximum contribution level.
15
direction in the restrictiveness of donation levels. While some countries like Bosnia & Herzegovina,
Romania, and Russia lifted up the maximum donation levels, other countries like Bulgaria, Latvia, and
Lithuania drifted in the opposite direction by cutting down the amounts a single donor was entitled to
give out.
Table 3: Maximum level of donations for physical and legal entities in countries
belonging to medium-high and high restrictive PFR
Country
Year Restrictiveness
Maximum level
Maximum level
type
of donations on
of donations on
physical entities
legal entities
Bosnia & Herzegovina 2000
Medium-high
8 AMW
8 AMW
Bosnia & Herzegovina 2010
Medium-high
8 AMW
15 AMW
Bulgaria
2001
Medium-high
BGN 30.000
BGN 30.000
Bulgaria
2005
Medium-high
BGN 10.000
banned
Croatia
2006
Medium-high
HRK 90.000
HRK 1.000.000
Georgia
1997
Medium-high
GEL 30.000
GEL 100.000
Latvia
1995
Medium-high
LVL 25.000
LVL 25.000
Latvia
2002
Medium-high
LVL 10.000
LVL 10.000
Latvia
2004
Medium-high
LVL 10.000
banned
Latvia
2008
Medium-high
100 MMW
banned
Lithuania
1999
Medium-high
500 MLS
500 MLS
Lithuania
2004
Medium-high
300 MLS
300 MLS
Macedonia
1994
Medium-high
100 AMW
100 AMW
Macedonia
2004
Medium-high
100 AMW
200 AMW
Macedonia
2009
Medium-high
75 AMW
150 AMW
Poland
2001
Medium-high
15 MMW
banned
Slovenia
1994
Medium-high
10 AMW
10 AMW
Turkmenistan
2012
Medium-high
10 AMW
10 AMW
Uzbekistan
2004
Medium-high
500 MMW
5.000 MMW
Moldova
2007
High
500 AMW
1.000 AMW
Montenegro
2008
High
€ 2.000
€ 10.000
Romania
1996
High
100 GMMW
500 GMMW
Romania
2003
High
200 GMMW
500 GMMW
Russia
2001
High
10.000 MMW
100.000 MMW
Russia
2008
High
RUB 4.330.000
RUB 43.300.000
Serbia
2003
High
10 AMW
100 AMW
Source: Author’s own elaboration based on countries’ legal framework
Note: MMW – Minimum monthly wage; GMMW – Gross minimum monthly wage; AMW – Average monthly wage; MLS –
Minimum living standard.
For comparison purposes I transformed data from table 3 controlling for wage levels and
exchange rates so as to assess cross-country variation in the restrictiveness of donation caps. This gives
us a more fine-tuned picture on donations and highlights within type variance. Figure 8 displays
impressive differences concerning the upper contribution levels. On the one hand, there are countries
that impose quite harsh requirements by establishing low spending levels on annual contributions from
private individual and corporate donors. Bosnia & Herzegovina, Bulgaria, Poland, and Turkmenistan
clearly belong to this group by establishing relatively modest annual contribution limits. On the other
16
hand, one finds Croatia, Georgia, and Macedonia with the most permissive rules, particularly due to high
levels established for corporate donors.
Lithuania, Latvia, and Slovenia are located in the middle by establishing similar caps for both
individuals and corporate donors. Uzbekistan can be included in this group as well due to similar caps
on corporate donations.
189.4
Figure 8: Maximum levels of donations from physical and legal entities for medium-high
restrictive cases 2007-2012 (US $ thousand).12
200
0
32.1
3.2
3.3
3.3
16.6
16.6
7
7
33.3
33.3
16.5
16.5
17
16.8
7.1
7.1
4.3
8.1
50
33.9
67.8
100
56.1
Thousand US $
150
BIH BGR GEO HRV LTU LVA MKD POL SVN TKM UZB
Physical entity
Legal entity
Source: Author’s own elaboration
Summary statistics provided in the table 4 is very instructive with regard to the stretch of
contribution limits for both categories of donors. The highest level of donations from individuals
established by Macedonia is 10 times larger than level fixed by Turkmenistan and Uzbekistan. Similarly,
the ratio concerning corporate donations is even higher. Even if one excludes Croatia as an outlier, the
ratio between the highest (Macedonia) and the lowest (Turkmenistan) levels of corporate donations is
about 20 times.
Table 4: Summary statistics on donations from physical and legal entities for countries
belonging to medium-high restrictiveness type 2007-2012 (thousand $)
Number of cases Mean Std. Dev. Minimum Maximum
Caps on donations: physical entities
11
14.45
11.04
3.2
33.9
Caps on donations: corporate entities
11
39.75
53.94
3.3
189.4
Source: Author’s own calculations
The values for individual and corporate donations are obtained by multiplying the number of monthly wages, according
to the law, to the wage value in the year of GRECO evaluation. The result is then divided by exchange rate of national
currency to US $. Data on wages and exchange rates are taken from National Statistical Offices and National Banks of each
country respectively.
12
17
Despite the fact that all these PFR belong to the same type, the data reveals that political parties
face different incentives and constraints towards their fundraisng strategies. Consequently, low levels of
donations represent a clear indicator of greater efforts needed to be carried out by parties relative to
higher levels of contribution limits.
2.4. High restrictive cases
High restrictive regimes establish both kinds of restrictions – limits on donations and total annual
income amassed form private contributions. Only five post-communist polities are encapsulated by this
financing regime. Romania, Russia, Serbia, Montenegro and Moldova imposed such legal constraints on
party finances but the timing of instituting harsher requirements greatly varied among them. Figure 9
eloquently shows the number of years each of them spent under harsher regulations.
Figure 9: Frequency of cases under a high restrictive regime by country 1990-2011
15
14
13
Frequency of cases
12
11
10
9
8
7
6
5
4
3
2
1
0
MNE
MDA
SRB
RUS
ROU
Source: Author’s own elaboration
Limits on donations
Romania was the first post-communist regime shifted towards high restrictive type although this
status was achieved only in 1996 before the third democratic elections, which means that previously party
finances were completely unregulated. Indeed the 1989 decree-law that laid the ground for the emergence
of political pluralism by setting up the rules for party registration and operation has only a single mention
regarding funding, namely parties were compelled to declare their financial means as a requirement for
18
their registration.13 For more than five years Romanian parties were operating in a quasi-legal vacuum,
including their financing. The 1996 Law on political parties brought about dramatic changes to the
previous situation.14 Both kinds of provisions have been introduced. Upper levels of donations were set
up at 100 GMMW and 500 GMMW for physical and legal entities respectively.
Several other quantitative and qualitative restrictions have been imposed. The maximum amount
collected from membership fees was capped at 50 GMMW from a single member. While these limits
clearly indicate a shift towards much tighter regulations, some relaxing provisions were still mirroring the
willingness of political parties to preserve some regulatory loopholes. For instance, the maximum amount
originating from membership fees was not capped altogether and private donors could keep their
anonymity for amounts below a certain threshold. This combination created sufficient maneuvering
room allowing political parties to conceal the origin of money.
Regulatory framework adopted in 1996 was replaced by a new one in 2003 which reflected a
softening of rules on contribution limits.15 While the donation caps for legal entities remained at the same
level as in 1996, i.e. 500 GMMW ($ 42.160), those for individuals were lifted up from 100 to 200 GMMW
($ 16.860). Another law on party funding was adopted in 2006 but the provisions regarding contribution
limits remained untouched (Art.5).16 Shortly afterwards, however, the regulations on contribution levels
were again relaxed. In 2008 Romanian government adopted an emergency ordinance according to which
the upper levels of donations from physical and legal entities were doubled when multiple elections are
held in the same year, thus fixing them at the equivalent of 400 and 1000 GMMW respectively (Art.5).17
These provisions can be regarded as particularly permissive towards political parties because they
were to be applied for every single election campaign during the same year when multiple elections are
held. Under such conditions it becomes obvious that incentive structure, set by regulatory framework,
was designed in a way that was highly prone to large contributions and did not boost, whatsoever,
grassroots funding although the provision according to which the total income amassed from
membership fees is uncapped remained in force (Art.4).
After Romania, Serbian party financing law enacted in 1997 already foreseen contribution limits
but the law had a serious shortcoming. While it established caps for legal entities amounting to 50 AMW
($ 6.750) it has not instituted any caps for physical entities (Goati, 2007, pp. 162–163; Stoyanov et al.,
2002, p. 91), an omission that rendered contribution limits on corporate donors completely ineffective.
Decret - Lege nr. 8 din 31 decembrie 1989 privind inregistrarea si functionarea partidelor politice si organizatiilor obstesti
din Romania.
14 L27/1996 Lege nr. 27 din 26 aprilie 1996 Legea partidelor politice: Legea nr. 27 publicată în Monitorul Oficial nr. 087 din
data: 04/29/96.
15 Lege nr. 43 din 21 ianuarie 2003 privind finanţarea activităţii partidelor politice şi a campaniilor electorale. Publicat în
Monitorul Oficial, Partea I nr. 54 din 30 ianuarie 2003.
16 Lege nr.334 din 17 iulie 2006 privind finanţarea activităţii partidelor politice şi a campaniilor electorale. Publicat în
Monitorul Oficial. nr. 632/21 iulie 2006.
17 OUG nr. 98/2008, ordonanta de urgenta pentru modificarea si completarea Legii nr. 334/2006 privind finantarea
activitatii partidelor politice si a campaniilor electorale. Publicat in Monitorul Oficial, Partea I nr. 630 din 29/08/2008.
13
19
This regulatory loophole was removed only in 2003 when a new law on party funding was enacted after
the breakdown of Milosevic regime.18 The new law capped annual donations at 10 AMW for individuals
and 100 AMW for legal entities (Art. 5).
Russia, on the other hand, introduced for the first time contribution limits for party daily
activity in 2001 capping individual donations at 10 thousand AMW ($ 34.275) and corporate donations
at 100 thousand AMW ($ 342.760) (Art.32).19 In 2008 Party Law was amended which resulted in an
increase of annual donation limit to RUB 4.330.000 for individuals ($ 174.000) and to RUB 43.300.000
for corporations ($ 1.740.000).20
Moldova and Montenegro joined the cohort of high restrictive regimes relatively late.
Montenegro introduced contribution limits only in 2008 when it passed a new Law on Party Financing
that capped individual and business contribution for the regular activity to € 2 thousand and € 10
thousand respectively (Art. 9).21 Only at the end of 2007 Moldovan legislature adopted a brand new law
on political parties which put in place a new regulatory framework on party financing. 22 The previous
legal framework that survived for more than 16 years did not envisage any restrictions regarding
contribution limits. It only focused on allowable financing sources.23 Notwithstanding the novelty of the
new legal frame, it turned out to be extremely generous with the size of contribution limits which were
set up at a very high level. Donation caps for physical and legal entities were set up at 500 and 1000 AMW
amounting to roughly $ 85.000 and $ 170.000 respectively at the moment of the law enactment. In this
respect, Moldova held the second top position after Russia among all post-communist regimes. It appears
that even if Moldovan political parties adopted a new law, it was drafted in a way that still left for them
quite a large maneuvering room concerning fundraising.
Albeit these polities shifted from unregulated to more constraining regimes, they still varied
largely regarding the maximum threshold of donations. High restrictive cases display an even higher
variation than medium-high cases regarding the upper contribution levels. As table 5 illustrates the range
between the minimum and maximum values of donations is extremely large.
Table 5: Summary statistics on donations from physical and legal entities for countries
belonging to high restrictiveness type 2010-2011 (thousand $)
Number of cases Mean Std. Dev. Minimum Maximum
Limits on donations: physical entities
5
63.8
66.6
2.7
147.3
Limits on donations: corporate entities
5
376.7
618.9
13.3
1473.1
Source: Author’s own calculations
Law on Financing of Political Parties. Official Gazette of the Republic of Serbia No. 72/2003, 75/2003.
Федеральный закон от 11 июля 2001 г. N 95-ФЗ, “О политических партиях”.
20 Федеральный закон от 22.07.2008 N 144-ФЗ, “О внесении изменений в статьи 30 и 33 Федерального закона “О
политических партиях”.
21 The Law on Financing of Political Parties. (“Official Gazette of Montenegro,” no. 49/08 from the 15th of August 2008).
22 Lege Nr. 294 din 21.12.2007 privind partidele politice Publicat: 29.02.2008 în Monitorul Oficial Nr. 42-44, art. Nr: 119.
23 Lege Nr. 718 din 17.09.1991 privind partidele şi alte organizaţii social-politice. Publicat: 04.05.2000 în Monitorul Oficial
Nr. 53, art. Nr: 340.
18
19
20
Figure 10 graphically depicts the variation among high restrictive cases with Montenegro and
Russia representing extremes.
Figure 10: Limits on donations from physical and legal entities for countries belonging
to high restrictiveness type 2010-2011
1473
thousand US $
1,500
1,000
500
240
120
0
2.7 13.3
Moldova
Montenegro
44
110
Romania*
physical entities
147.3
4.7
Russia
47
Serbia
legal entities
Source: Author’s own elaboration
Note: * - What concerns Romania in years when multiple elections are held the upper level of donations from
physical and legal entities is set up at the equivalent of US $ 88 thousand and US $ 220 thousand respectively.
In spite of the presence of contribution limits, there were additional loopholes that made
regulatory regime more permissive than they appeared to be. For instance, Serbia, Montenegro and Russia
did not impose any limits on the maximum levels of membership dues. This situation could entail “a
theoretical risk that the legal limits on donations could easily be circumvented”24 by “means of unlimited
membership fees”.25 Although such a risk was minimal in post-communist space, given the tiny share of
membership fees in the overall party income, the poor regulation of membership fees in relation to
donations was a common issue for many countries.
On the other hand, Romania and Moldova impose harsher rules on membership fees but even
in their case one may notice some regulatory loopholes. While the annual cap on membership fees
changed several times in Romanian legislation (1996 – 50 GMMW; 2003 – 100 GMMW; 2006 – 48
GMMW), the total income collected from membership fees has never been capped. Moldova applied to
membership fees the same rules as for donations, so they turned out to be quite permissive.
24 Evaluation
Report on Montenegro Transparency of Party Funding (Theme II) Adopted by GRECO at its 49th Plenary
Meeting (Strasbourg, 29 November – 3 December 2010), p.16.
25 Evaluation Report on the Republic of Serbia Transparency of Party Funding (Theme II) Adopted by GRECO at its 48th
Plenary Meeting (Strasbourg, 27 September – 1 October 2010), p.16.
21
Limits on total income
The second distinctive property of the high restrictiveness type is the presence of quantitative
restrictions on the total amount of revenue parties are allowed to raise annually from donations. All five
countries that belong to this type provide for limits on aggregate income and, to some extent, are
indicative for the leeway available to parties in devising their fundraising strategies. By the leeway I mean
the minimum number of donors, as pointed out in methodological section, needed to reach the upper
limit on aggregate income.
Again, Romania was the first post-communist polity that introduced a restriction on aggregate
income amassed by parties from private donations throughout a calendar year. However, as in case of
private contributions these restrictions were relaxed suggesting an increase in parties’ demand for
financing. In 1996 the maximum level was established at the equivalent of 0.005% from the state
budgetary revenue with the possibility to be doubled for the election years, thus reaching 0.01% out of
the total (Art.35).26 This provision remained in place until 2003 when it was replaced with a new one
which fixed the upper level of total income collected from private sources at 0.025% the equivalent of
the state budgetary revenue, indicating a fivefold increase relative to the previous limit, at the same time
maintaining the clause that envisaged to double this amount to 0.05% in the fiscal years when multiple
elections are held (Art.5).27
Russia introduced for the first time a limit on total annual party income accrued from private
contributions in 2001 setting out the limit at 10 million MMW, including party regional branches. An
additional condition was that each regional branch could not amass income from private contributions
exceeding 200 thousand MMW (Art.30).28 This limit was significantly lifted up in 2008 by an amendment
to party law which replaced the previous cap by a fixed sum amounting to RUB 4.330 million. At the
same time each party regional branch could not collect from donations more than RUB 86.6 thousand.29
Given their common statehood up to Montenegro independence in 2006 party finance
regulations of Serbia and Montenegro shared many common features, yet they followed different paths.
What concerns the maximum level on aggregate income collected from private sources, their
regimes resembled each other by tying this amount to public funding. The only difference was the size
of state aid. This implies the presence of differentiated limits for beneficiaries and non-beneficiaries of
state subsidies. For parties that qualify for state subsidies the aggregate income from private contributions
should not exceed 100% the amount they receive from public purse. A different formula was applied to
parties that do not receive public funding. For them the upper limit for the revenue amassed from private
L27/1996 Lege nr. 27 din 26 aprilie 1996 Legea partidelor politice: Legea nr. 27 publicată în Monitorul Oficial nr. 087 din
data: 04/29/96.
27 Lege nr. 43 din 21 ianuarie 2003 privind finanţarea activităţii partidelor politice şi a campaniilor electorale. Publicat în
Monitorul Oficial, Partea I nr. 54 din 30 ianuarie 2003.
28 Федеральный закон от 11 июля 2001 г. N 95-ФЗ, “О политических партиях”.
29 Федеральный закон от 22.07.2008 N 144-ФЗ, “О внесении изменений в статьи 30 и 33 Федерального закона “О
политических партиях”.
26
22
contributions must not exceed 5% from the total amount of state subsidies in the respective calendar
year (Serbia/Art. 5; Montenegro/Art. 9).30 Such a formula creates evident disparities by disadvantaging
non-parliamentary parties twice. First, they do not have access to state subsidies and, second, they are
confined in gathering resources form private contributions above a certain limit.
Finally, Moldova’s new regulations on party funding imposed an annual income limit from private
contributions at the equivalent of 0.1% from the state budgetary revenue foreseen in the respective year
(Art.26).31
Extensiveness of the donors’ network
As one could observe all high restrictive cases significantly vary with regard to maximum levels
of donations and aggregate income. Nevertheless, they still share a common property – their regulations
are designed in such a way that allows political parties to rely on a handful of donors. It implies that
parties do not need to expand and nurture large networks of donors. It suffices to resort on an extremely
narrow group who can afford to carry the burden of financing, provided that political actors can reach
them. At least, legal framework makes possible this kind of arrangements.
Knowing the donation caps for physical and legal entities and limits on aggregate income it is
possible to estimate the scope of donors’ network that indicates the minimum number of donors
necessary to reach the upper limit for total income. Relying on legal provisions for high restrictive cases
I transformed data on donations and total income to make it comparable across cases in order to assess
the extensiveness of donors’ network. Regardless cross-case variation towards levels of donations and
aggregate income, this is the best indicator of comparing these cases since it captures the incentive
structure of fundraising. Table 6 is quite telling in this respect. Column 6 and 7 illustrate the stretch of
donors’ network for each country. For several of them including Romania, Russia and Serbia it was
possible to show the developments over time since they introduced both types of limits earlier. Moldova
and Montenegro adopted restrictive regulation much later and, therefore, did not offer the opportunity
to observe their developments for a longer time span. Overall, columns 6 and 7 represent the ratio
between total income limit (column 5) and contribution caps for physical (column 3) and legal (column
4) entities respectively.
Table 6: The size of donors’ network for countries belonging to high restrictiveness type
Country
Year
Donation
Donation
Total
Minimum
Minimum
cap on
cap on
income
number of number of
individuals
corporations
limit
individual
corporate
$
$
$
donors
donors
1
2
3
4
5
6
7
Montenegro*
2010
2.650
13.250
129.349
49
10
Serbia*
2003
2.000
20.000
416.559
208
21
Law on Financing of Political Parties published in the ”Official Gazette of the Republic of Serbia” No. 72/03 (18 July
2003), 75/03 (25 July 2003), 97/08 (27 October 2008) and 60/09; The Law on Financing of Political Parties (“Official
Gazette of Montenegro,” no. 49/08 from the 15th of August 2008).
31 Lege Nr. 294 din 21.12.2007 privind partidele politice Publicat: 29.02.2008 în Monitorul Oficial Nr. 42-44, art. Nr: 119.
30
23
Serbia*
Serbia*
Moldova
Moldova
Romania
Romania
Romania
Romania
Russia
Russia
Russia
Russia
2004
2010
2009
2010
1996
2000
2003
2010
2001
2003
2008
2011
2.435
4.700
123.590
120.125
2.433
3.227
16.860
44.000
34.275
32.500
174.077
147.305
24.350
47.000
247.180
240.250
12.165
16.134
42.160
110.000
342.760
325.055
1.740.770
1.473.050
459.512
437.479
1.185.695
1.338.889
303.843
277.379
2.424.000
5.235.100
34.275.900
32.505.500
174.035.370
147.212.740
189
93
10
11
125
86
144
119
1.000
1.000
1.000
1.000
19
9
5
6
25
17
57
48
100
100
100
100
Source: Author’s own calculations
Note: * Data on Montenegro and Serbia income reflects only the minimum number of donors needed for parties that do not
have access to public funding.
As one can notice, the size of donors’ network for each country is quite tiny. Even though there
is a quite high variation among countries regarding the stretch of donors’ networks, it should be noted
that this variation also springs from the country size: the larger the country the more expanded a network
of potential donors is expected to be. Notwithstanding this variation, what clearly emerges from sixth
and seventh columns is a pattern whereby political parties are not bound to rely on a broad network of
potential contributors to secure their annual funding originating from private contributions. On the
contrary, the figures indicate rather a situation where the regulatory framework creates favorable
conditions for parties to rely on a bunch of affluent contributors. Furthermore, regulatory changes do
not seem to affect significantly the incentive structure over time. Serbia did not experience any changes
in this respect and observed dynamics derive solely from the fluctuations in the share of budgetary
revenue allotted to parties and wage levels. Russia and Romania, on the other hand, amended their PFR
but this did not affect at all the underlying incentive structure. Russia is the best illustration of this
situation, since the amendments passed in 2008 perfectly preserved the ratio between the aggregate
income limits and contribution limits for physical and legal entities. Almost the same could be applied to
Romania regardless of the observed variation over time.
A striking paradox emerges with respect to PFR belonging to high restrictiveness type concerning
income limits. It appears that these regimes are, in the end, not so restrictive when we look at the
underlying incentive structure. If so, then the fundamental question is what makes them so distinctive
from the other types that display a lower restrictiveness degree? The difference is quite straightforward
in the case of low and medium-low types. Due to the lack of any restrictions laid down by law on private
contributions, financial resources could be provided by a single donor. And this makes them by far less
restrictive. The medium-high type represents a more difficult case. As already highlighted, the harshness
of rules in the high type also stems from its second substantive property, that is, limits on total income.
However, when we compare them resorting to the maximum levels of donations this is not anymore so,
particularly when the variation is relatively high. This fact might not be so relevant during the regular
24
party activity but might be crucial during election campaigns where the intensity of political competition
is much higher. In the next paragraph I turn to the investigation of contribution and aggregate limits
during election campaigns.
2.5. Conclusion
In this paragraph, I examined the developments of party funding regimes concerning party regular
activity for roughly two decade since the inception of transition from the communist rule. Three main
conclusions can be drawn from the empirical analysis of party funding regulations.
First, party daily activity proved to be a neglected area and daily financial activity of political
parties for a long time remained almost completely unregulated. For the first decade of transition only a
handful of ex-communist regimes polities passed more restrictive regulations on donations and limited
the total income political parties could amass from private sources. The shift towards more restrictive
rules occurred relatively late and in many cases the newly enacted regimes were still flowed by serious
shortcomings allowing political actors to circumvent existing regulations. Furthermore, at the moment
of GRECO assessment, almost half of post-communist regimes did not place any restrictions on the
amount a single donor could contribute to party pockets and on the total income amassed from these
contributions. Figure 11 explicitly shows this thorny and slow shift. Only after 15 years since the onset
of transition the pool of more regulated regimes began to outnumber the pool of financing regimes with
no constraints on party income.
Second, despite of partial shift towards more restrictive rules, there was a large variation within
cases belonging to the same restrictive type which sprang from different contribution levels and aggregate
income levels. In the majority of cases, the maximum values of donations were set up at relatively high
levels making thus fundraising a relatively easy task, at least from a legal viewpoint.
Third, despite of significant cross-country differences concerning the maximum levels of
donations and the upper levels of total campaign revenue, their interaction turned out to generate a
similar incentive structure regarding fundraising. Even the most restrictive financing regimes that
instituted both kinds of income restrictions proved to be extremely permissive towards political parties,
creating proper conditions to focus their fundraising strategies on a handful of wealthy donors.
25
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
number of cases
Figure 11: Overtime distribution of restrictiveness regimes for party regular activity 1990 – 2012
low
high
medium-low
high-extreme
medium-high
Source: Author’s own elaboration
3.The development of legal framework on financing with respect to election campaigns
3.1. General trends regarding restrictiveness of income from private sources for election
campaigns
If at the onset of transition, the funding of party regular activity received relatively little attention,
then financial aspects of election campaigns quickly became the primary concern of post-communist
politicians. Irrespective of domestic election cycles already in the middle of ’90 almost two thirds of these
polities took one or another stance towards campaign contributions and aggregate spending limits.
Figure 12 shows the distribution of CEE and FSU countries based on restrictiveness of their
electoral rules on income limits. Unlike party regular activity we may notice that campaign financing
regulations cover the entire range of restrictiveness types.
26
Figure 12: Restrictiveness of party financing regimes with respect to income limits for
election campaigns 1990 – 1996.
Source: Author’s own elaboration
Note: Extreme-high (to substitute prohibitive with extreme high) - political opposition is banned or private contributions are
prohibited altogether; High - limits on contributions from physical and legal persons & and limits on total campaign spending;
Medium-high - only limits on contributions from physical and legal persons; Medium-low - only limits on total campaign
spending; Low - no limits.
Yet unlike party regular activity, electoral competition turned out to be much more regulated
despite of poor enforceability of many provisions related to election financing. Compared to party regular
activity, where roughly two thirds of cases featured low restrictiveness values, the frequency of cases
(elections) held under low restrictive regimes is much lower. Only in 27 percentage of cases across all
post-communist regimes electoral subjects did not face any restrictions concerning income limits. Table
7 shows the full distribution of cases between different restrictiveness types.
Table 7: Frequency of election campaigns spent by post – communist polities under
different restrictiveness regimes 1990 – 2012.
Restrictiveness degree
Number of cases Percentage of cases Cumulative percentage
Low
47
27.81
27.81
Medium-low
32
18.93
46.75
Medium-high
16
9.47
56.21
High
59
34.91
91.12
High-extreme*
15
8.88
100
Total
169
100
Source: Author’s own elaboration
Note: * Extreme-high restrictive regime exemplifes an extreme value of high type given the full ban on income from private
sources and is usually present in authoriatarian regimes. For this reson I present it separately but it does not constitute a
distinct restrictiveness type.
On the contrary, in one third of all parliamentary campaigns electoral competitors were subject
to both kinds of limits while in other almost 30 percent they faced at least one restriction. The density of
election financing regulations unveils the high stakes involved in electoral competition.
Regulatory density is somewhat captured from a different vantage point by the magnitude of
change presented in table 8.
27
Table 8: Magnitude of change in restrictiveness degree for party electoral activity 1990- 2011.
Magnitude of change
Number of countries
Percentage
-1
2
7.14
0
7
25
1
7
25
2
5
17.86
3
7
25
Source: Author’s own elaboration
As one may notice, more than two thirds of post-communist polities experienced a shift from a
lower to a higher restrictiveness type over time, albeit the magnitude of change varies. Seven of them
experienced the largest possible jump of three units, other five went through a smaller change of two
units, while another quarter experienced one unit change. Seven polities maintained their status-quo and
the last two represented by authoritarian regimes liberalized their rules on private funding.
This change is captured by figure 13 which depicts a less diverse picture. Two thirds of excommunist regimes that record a high restrictiveness score clearly dominate the landscape. Other cases
are almost evenly scattered between the other restrictiveness types.
Figure 13: Restrictiveness of party financing regimes with respect to income limits for
election campaigns 2007 – 2011.
Source: Author’s own elaboration
Note: Extreme high (to substitute prohibitive with extreme high) - political opposition is banned or private contributions are
prohibited altogether; High - limits on contributions from physical and legal persons & and limits on total campaign spending;
Medium-high - only limits on contributions from physical and legal persons; Medium-low - only limits on total campaign
spending; Low - no limits.
Last but not least, the timing and pace of change. Figure 14 shows the trajectories of election
financing regimes for all post-communist countries.
28
BG
BY
CZ
EE
GE
HR
HU
KG
KZ
LT
LV
MD
ME
MK
PL
RO
RS
RU
SI
SK
1990
1993
1996
1999
2002
2005
2008
2011
High-extreme
High
Medium-high
Medium-low
Low
BA
1990
1993
1996
1999
2002
2005
2008
2011
High-extreme
High
Medium-high
Medium-low
Low
AZ
TJ
TM
UA
UZ
1990
1993
1996
1999
2002
2005
2008
2011
High-extreme
High
Medium-high
Medium-low
Low
AM
1990
1993
1996
1999
2002
2005
2008
2011
High-extreme
High
Medium-high
Medium-low
Low
AL
1990
1993
1996
1999
2002
2005
2008
2011
Restrictiveness degree
High-extreme
High
Medium-high
Medium-low
Low
1990
1993
1996
1999
2002
2005
2008
2011
Figure 14: Timing and pace of change between different election financing regimes in
post-communist space 1990-2012.
Source: Author’s own elaboration
Restrictiveness of financing rules for election campaigns might be determinant for electoral
success. This is particularly relevant for newcomers since different rules may affect their electoral odds.
Therefore, electoral competition can be managed by raising or lowering the entry barriers through the
manipulation of financing regulations. From this perspective the timing, frequency and magnitude of
change in the restrictiveness degree may play a significant role even if the alteration of financing rules
takes place within the same restrictiveness type, for instance, through raising or lowering the upper levels
of donations, campaign spending, or electoral deposit.
In the main, figure 14 captures all factors indicated above displaying the timing of shifting towards
a more restrictive regime, the frequency and direction of change as well as the magnitude of change. The
prevalent pattern that emerges indicates an upward move on the restrictiveness ladder, even though the
magnitude of change fluctuates between more incremental and steeper regulatory adjustments. Several
other polities (Czech Republic, Estonia, Turkmenistan and Uzbekistan) record a status-quo regardless of
differences in their restrictiveness degree. And some other polities (Poland, Slovakia, Bulgaria, Georgia,
Ukraine) exhibit fluctuations in both directions of restrictiveness.
29
In the following sections I scrutinize each restrictiveness type concerning election financing also
looking at within type variation that derives from differences in the maximum levels of contributions and
total campaign income.
3.2. Low restrictive cases
Since there are no legal restrictions on income limits I employ the same indicator as for party
regular activity with the only difference that election campaign represent the unit of analysis.
Consequently, the frequency of election campaigns held under regimes envisaging neither donation
limits nor limits on aggregate campaign income is a common feature of low restrictive cases. Figure 15
presents country differences concerning elections held under the absence of any income limits.
Albania, Serbia, Croatia, Estonia, Slovakia, and Czech Republic represent the group with the
highest number of election campaigns organized under such a liberal financing regime. At the moment
of GRECO assessment Slovakia, Czech Republic and Estonia were still encapslate by a low
restrictiveness type. Among these three cases Czeck Republic and Estonia have never adopted
regulations restricting the amount of private contributions or campaign total income. Slovakia however
shifted from a medium-low PRF instituted in 1994, that limited campaign funding at SKK 12 million,
towards a low PFR in 2005.32 The new party law adopted in 2005 abolished the 1994 law on campaign
expenditure but did not replace previous spending caps with new ones, thus removing, actually, the
limits on campaign expenditure (Casal Bértoa et al., 2014, p. 18). Albania switched to a more restrictive
regime only in 2005 while Croatia even later, in 2011.
32
Act 85 of the 4th of February, 2005 “On Political Movements and Political Parties”.
30
Figure 15: Frequency of cases under a low restrictive regime for election financing by
country 1990-2012
7
Number of elections
6
5
4
3
2
BI
H
M
N
E
SV
K
AL
B
SR
B
ES
T
H
R
V
C
ZE
0
AZ
E
KG
Z
U
KR
H
U
N
R
O
U
1
Source: Author’s own elaboration
On the other extreme one finds countries with the lowest number of elections held without
restrictions on campaign income. Azerbaijan and Kyrgazstan did not regulate campaign income only for
the first elections held after the collapse of USSR, while Hungary and Romania shifted to more restrictive
regimes after two rounds of democratic elections organized under the lack of regulations on campaign
income.
3.3. Medium-low restrictive cases
Medium-low restrictiveness type encapsulates those cases that feature a limit on the aggregate
campaign income. This regulatory measure turned out to be the most popular across post-communist
regimes. It was employed separately in roughly one fifth of elections and together with donation limits it
was used for another third of election campaigns. Figure 16 illustrates the distribution of cases for election
financing regimes that used exclusively limits on aggregate campaign income.
Hungary, Kazakhstan and Moldova display the highest frequency of elections held under such a
regime. On the other extreme, Armenia, Latvia, and Ukraine exhibit the lowest frequency. In the middle
there are other six countries that imposed caps on the maximum amount parties and candidates could
amass in their election fund.
31
Figure 16: Frequency of cases under a medium-low restrictive regime for election
financing by country 1990-2012
5
Number of elections
4
3
2
KA
Z
A
M
D
SV
K
H
U
N
PO
L
E
M
N
BG
R
LT
U
EO
G
U
KR
LV
A
0
AR
M
1
Source: Author’s own elaboration
Kazakhstan is the only post-communist country that used exclusively this financing regime for
all parliamentary elections. Campaign limits were introduced in the first 1995 elections allowing each
candidate to spend about US $ 7 thousand. This rule applied for both self-nominated and party
nominated candidates. The law did not deal with parties as electoral competitors and its provisions
applied only to candidates (Art. 92).33 Besides quantitative restrictions, it also imposed several qualitative
restrictions. The upper limit on electoral fund of candidates for deputies was fixed at 1700 MMW. Yet
candidates’ own funds and nominating party funds should not exceed 200 and 500 MMW respectively,
while the aggregate value of donations was limited to 1000 MMW (Art.92). 34 Before the 1999
parliamentary elections, electoral law was considerably amended by legalizing political parties as electoral
competitors and, therefore, establishing limits on total campaign income. While the limits on aggregate
campaign income remained at the same level, that is 1.7 thousand MMW, the upper limit for total party
income was set out at 15 thousand MMW. Furthermore, out of this total parties could contribute to their
election fund with 5 thousand MMW whereas the equivalent of 10 thousand MMW could be accrued
from donations. Additionally, the law explicitly prohibited candidates competing on party lists to create
Конституционный закон Республики Казахстан от 28 сентября 1995 года № 2464 “О выборах в Республике
Казахстан” (Ведомости Верховного Совета Республики, 1995 г., № 17-18, ст.114).
34 “О выборах в Республике Казахстан”. Конституционный закон Республики Казахстан от 28 сентября 1995 года, N
- 2464.
33
32
a personal election fund (Art.92-1).35 In fact, new provisions on party financing were reflecting the change
of electoral system that reserved 10 out of 77 seats to be contested on a proportional representation basis
at national level. Another reshuffling of electoral system took place in 2007 following a constitutional
amendment that has laid the ground for a purely party based competition by switching towards a full
proportional representation.36
As result, the provisions on candidate financing have been abolished. Under new regulations,
candidates could compete in elections exclusively via party lists and were forbidden to open individual
electoral funds. Notwithstanding these fundamental changes, legal provisions on campaign total income
remained unaffected (Art.92-1).37
Hungary introduced for the first time caps on campaign total income in 1997 and since then the
value of the upper limits remained unchanged. According to legal provisions, each individual candidate
and nominating party could spend no more than one million forints per candidate in elections in addition
to public funding (Art. 92).38 Table 9 shows the dynamics on campaign income for parties and candidates
in US $.
Table 9: the maximum limits on campaign spending for candidates and parties in
Hungary (US $)
Competitor ↓/Elections →
1998
2002
2006
2010
Candidates
4.780
3.595
4.715
5.140
Political Parties
1.845.080
1.387.670
1.819.990
1.984.040
Source: Author’s own calculations
Note: Exchange rates retrieved from the Central Bank of Hungary (Magyar Nemzeti Bank) 1998 $ 1=209.13; 2002 $ 1=278.23;
2006 $ 1=212.03; 2010 $ 1=194.5. The maximum amount for a party is calculated by multiplying the amount spent for 1
candidate to 386, i.e. the size of Hungarian Parliament.
Campaign limits became a common feature of Moldovan parliamentary campaigns since the
founding elections held in 1994 when the maximum levels were set up at MDL 100 thousand for each
political party and at MDL 2.5 thousand for individual candidates (Protsyk & Osoian, 2008). This
regulatory type survived until the 2009 legislative elections when it was replaced by a more restrictive
regime.
Many former soviet republics shared this regulatory feature but differed regarding its use.
Lithuania, Armenia and Ukraine similarly applied campaign limits for their founding democratic
elections. Lithuania fixed the maximum level in the 1992 parliamentary elections at 200 and 20 AMW
for parties and individual candidates respectively (Art. 45).39 The 1993 law on elections to Ukrainian
Конституционный закон Республики Казахстан от 6 мая 1999 г. № 375-1 О внесении изменений и дополнений в
Указ Президента Республики Казахстан, имеющий силу конституционного закона, “О выборах в Республике
Казахстан”.
36 Закон Республики Казахстан от 21 мая 2007 года № 254-III “О внесении изменений и дополнений в
Конституцию Республики Казахстан”.
37 Конституционный закон Республики Казахстан от 19 июня 2007 года N 268 О внесении изменений и
дополнений в Конституционный закон Республики Казахстан “О выборах в Республике Казахстан”.
38 Hungary: Act C of 1997 on Electoral Procedure.
39 Republic of Lithuania Law on Elections to the Seimas 9 July 1992, No. I-2721.
35
33
Parliament (Verkhovna Rada) established the upper level of campaign income at 100 MMW for
candidates in SMD (Art. 36; Art. 1).40 Armenia’s 1995 Parliamentary elections law capped total campaign
income for both majoritarian and party lists candidates at 500 MMW (Art.5) (IFES, 1996, p. 53). Georgia
did the same for its 1992, 1995 and 1999 parliamentary elections by empowering CEC to determine the
maximum level of the election fund. In the 1995 parliamentary elections this level was fixed by the CEC
at 2000 Lari per candidate. 41 Campaign limits were abolished in 2001 by the unified electoral law which
did not prolong the powers of CEC to fulfil this task as foreseen by 1995 law on parliamentary elections.
Poland introduced its first restrictions on total campaign income already for its 1991
parliamentary elections. The limit on aggregate campaign income was set up at 60 AMW for every
regional list of candidates (Art. 134) with a minimum number of seven candidates per electoral district
(Art. 36: 3).42 Yet, for two subsequent elections these limits were abolished and reintroduced only in 2001.
Slovakia enacted in 1994 a separate law on campaign spending limits by fixing the upper cap at SKK 12
million.43 The same value of spending limits was used for the 1994, 1998, and 2002 parliamentary contests
but in the end this provision was abolished in 2005, thus bringing Slovakia under a low restrictive regime.
This short exposition illustrates the diversity of approaches in controlling the cost of elections
through limits on campaign income. The regulatory focus on parties or candidates is clearly linked to
electoral system design. In the majority of cases depicted above the limits on total campaign income is
tied to candidates not parties. Methodologically speaking candidates constitute a better proxy to scrutinize
the harshness of regulations than parties. If we know the upper limit on candidates’ election fund, then
the maximum limit for parties is implicitly present, although it might not be clearly spelled out in the law.
Furthermore, focus on candidates also captures the differences in the size of national legislatures.
As we could notice, the variation springing from limits on total income even for those cases that
belong to medium-low type is impossible to assess given disparities in wage levels and various caps on
total income measured in MMW, AMW or fixed amounts.
Yet, this variation is not relevant for the supply side of elections, i.e. how much a donor can
provide. Hence, regardless of the observed variation towards the upper levels of campaign income,
medium-low cases are similar to low restrictive cases since election costs can be borne by a single donor,
provided that she is able and/or willing to accomplish this task. The lack of contribution limits makes
this possible from a legal point of view.
“О выборах народных депутатов Украины” (Ведомости Верховной Рады Украины, 1993 г., N 48, ст. 455.
Report on Parliamentary elections in Republic of Georgia, 5 November 1995. OSCE Election Report, 1 February 1996.
OSCE Parliamentary Assembly, pp. 4-5.
42 Law of 28 June 1991. Regulations on elections to the Sejm of the Polish Republic. Journal of Laws Nr 59, item 252 of 3
July 1991.
43 Act of the National Council of the Slovak Republic of 18 August 1994 on limitation of expenditures of the political
parties on advertising before elections to the National Council of the Slovak Republic.
40
41
34
3.4. Medium-high restrictive cases
Medium-high restrictive cases feature the presence of an upper limit on donations from physical
and legal entities. This regulatory tool was used, as a rule, together with limits on aggregate campaign
income. Separately, however, donation caps were used to regulate campaign income in less than 10
percent of cases. Figure 17 presents cross-country distribution of elections held under a medium-high
restrictiveness type.
Figure 17: Frequency of cases under a medium-high restrictive regime for election
financing by country 1990-2012
Number of elections
4
3
2
EO
G
U
KR
LV
A
U
R
O
SV
N
R
U
S
M
KD
0
H
R
V
1
Source: Author’s own elaboration
Eight post-communist regimes employed this legal tool to control election financing for different
time spans. Georgia recorded the highest frequency while other four used it separately only once. Slovenia
introduced donation limits on physical and legal entities already for parliamentary elections held in 1990.
Individuals were allowed to contribute to election campaign the equivalent of 1 AMW, whereas legal
entities – the equivalent of 10 AMW (Toplak, 2007, p. 171). The regulations on contributions remained
quite stable over time with the only alignment of contribution levels for individuals at the same level as
for legal entities, namely 10 AMW. Similarly, contribution limits were imposed on physical and legal
entities for the first democratic elections to the Russian State Duma.44 Though financing provisions were
quite complex they still contained serious loopholes. Given the electoral system design different limits
were set up on contributions to election funds of parties and candidates. Physical persons could donate
Указ Президента РФ от 1 октября 1993 г. N 1557 “Об утверждении уточненной редакции Положения о выборах
депутатов Государственной Думы в 1993 году и внесении изменений и дополнений в Положение о федеральных
органах власти на переходный период”.
44
35
up to 30 MMW and 20 MMW to the election funds of parties/electoral blocks and candidates
accordingly, whereas contributions from legal entities to election funds of parties and candidates were
fixed at 20 thousand MMW and 200 MMW respectively (Art. 32). The fundamental shortcoming of
regulatory framework regarding private contributions did not lie with donation limits themselves. It
derived from the fact that besides individuals and businesses the law authorized other entities like
candidates and parties to contribute themselves to own election fund but does not set out any limits in
this respect. Therefore, one witnesses a situation in which candidates and parties/electoral blocks are
authorized to contribute unlimitedly to their own election fund but there was no way to check the origin
of this money since the regular financing of parties was not regulated, at least what concerns contribution
limits. Although this loophole was, somewhat, narrowed down already for the next elections in 1995, by
clearly prescribing the limits for personal resources transferred by parties and candidates to their own
electoral fund (Art. 52)45, the issue concerning the origin of money before election campaign still
remained unsolved. This was a common feature of PFR in several other former soviet republics like
Azerbaijan, Armenia, Kazakhstan, Kyrgyzstan, and Tajikistan.
The other three cases belonging to medium-high restrictiveness type are represented by Latvia,
Macedonia and Romania. Only few issues should be clarified with regard to these cases since I discussed
their regulations on limits for the regular party activity. Latvia and Romania did not impose specific limits
on campaign contributions, given the presence of caps on annual donations, meaning that campaign
limits were subsumed into annual caps. Macedonia, alike, established annual caps on donations but unlike
Romania and Latvia the maximum level was doubled for election years. Hence, if usually a donor could
donate up to 100 AMW during a non-election year, then for elections the limit was fixed at 200 AMW
(Art. 30).46
Figure 18 presents transformed data on donation levels controlling for wages and exchange rates.
It displays huge cross-country differences regarding the upper donation levels. As in the case of party
regular activity, Russia’s regulations on donations appear to be the least restrictive. Yes this
permissiveness unfolds only towards the relationship between political parties and legal entities. Parties
were also privileged in relation to individual candidates for whom contribution limits were established at
much lower levels amounting to about $ 170 from individuals and $ 1700 from organized interests.
Slovenia, on the other hand, records the lowest levels of private contributions. Macedonia and Latvia are
the closest peers. Both of them established the same levels of donations for individuals and businesses,
even if Latvia’s maximum level is roughly 25% higher. Yet, given the fact that both countries also have
Федеральный закон от 21.06.1995 N 90-ФЗ “О выборах депутатов Государственной Думы Федерального Собрания
Российской Федерации”.
46 Law on Political Parties (Official Gazette of the Republic of Macedonia no. 41/94), retrieved from
https://web.archive.org/web/20041012230714/http://www.mlrc.org.mk/law/l015.htm.
45
36
comparable sizes of electoral market in terms of registered voters, the maximum levels of donations can
be regarded as quite generous, thus allowing parties to concentrate their fundraising on big donors.
20
0,
00
0
Figure 18: Maximum levels of donations on physical and legal persons during election
campaigns for medium-high restrictiveness cases
10
0,
00
0
US $
15
0,
00
0
168340
47400 47400
50
,0
00
35900 35900
12165
0
2430
LVA
MKD
ROU
physical entities
250
370
RUS
3700
SVN
legal entities
Source: Author’s own elaboration
The pool of medium-high restrictive cases enlarged by the joining of Croatia, Georgia and
Ukraine. Croatia may be regarded as a latecomer in the group of medium-high restrictiveness cases.47 The
law that changed its restrictiveness status concerning donation limits from the low to the medium-high
was enacted only in 2006. According to new provisions the annual maximum limits on donations from
individuals and businesses were fixed at HRK 90 thousand and HRK 1 million respectively (Art. 4). 48
Georgia switched to a medium-high regime much earlier. Although Georgian party law foreseen
annual caps on donation for individuals and businesses since 1997 fixing the upper level at 30 thousand
and 100 thousand Lari, in shifted to the medium-high regime only in 2001 when the upper limit on
campaign spending was abrogated. Moreover, since the introduction of donation caps the maximum
levels of donations remained the same overtime.
Last but not least, Ukraine had a rather tumultuous experience with respect to donations and
aggregate campaign limits.49 For the first democratic elections to Verkhovna Rada in 1994 it embraced a
For the comparative analysis of the donation levels, Croatia, Georgia and Ukraine will be joined with cases from the pool
of ‘high’ restrictiveness PFR.
48 The Act on the Financing of Political Parties, Independent Lists and Candidates (No.: 006-01/06-02/01, Zagreb, 15
December 2006).
49 Given the fact that Ukraine had the most unstable rules on election financing I prefer to analyse this fluctuation overtime
instead of
47
37
medium-low PFR regime setting out the limit on candidates’ election fund to the equivalent of 100 times
the minimum non-taxable income (Art. 36).50 This was the lowest limit on campaign income across all
post-communist countries (about $ 190). In addition, it was an extremely unrealistically low limit to be
enforced. In some electoral districts it was even impossible to buy one minute of TV advertisement on
an independent broadcasting company (Protsyk & Walecki, 2007, p. 194). Paradoxically but an
amendment to Rada elections law passed in 1995 lowered this cap to a symbolic one fixing it at 20 times
the minimum non-taxable income.51 Yet the risk entailed by this amendment was acknowledged on the
eve of the next parliamentary elections and the new law on elections of deputies enacted in 1997
completely removed campaign spending limits.52 Consequently, the lack of donation caps and total
campaign limits pushed Ukraine to the low restrictiveness regime.
The situation changed again before the 2002 Rada elections. The new law on elections of deputies
passed in October 2001 introduced both types of limits: on contributions and campaign total income
(Art. 36).53 The upper limit for donations from individuals was fixed at 1000 times the minimum nontaxable income (about $ 3200). The law implicitly banned donations from legal persons to election funds
of parties and candidates. Nevertheless, there were no legal provisions that would prohibit them to
contribute to party or electoral coalitions budgets. Since parties and electoral coalitions were allowed to
contribute to their own election funds unlimited amounts, this omission actually opened the backdoor
for corporate donations. Given the shift form a majoritarian (450 seats elected in SMD) towards a mixed
electoral system (225 seats SMD; 225 seats PR) in 1997 (Art. 1),54 the 2001 election law set out campaign
limits to both parties and candidates. The maximum limit on party campaign fund was fixed at 150
thousand (about $ 480 thousand) while the same cap for majoritarian candidates was set at 10 thousand
times the minimum non-taxable income (about $ 32 thousand). These regulations clearly favoured
candidates competing in SMD relative to their fellows competing on party lists. The spending ratio for
majoritarian candidates was 15 higher relative to those running for elections on party lists. These
amendments pushed Ukraine into the pool of high restrictive regimes for the 2002 Rada elections.
Regulatory turbulences continued and the next Rada elections (2006) were held under a fully-fledged
party list proportional representation with amended limits on private contributions but no limits on
campaign total income (Art. 53).55 This again changed the restrictiveness status thus driving Ukraine into
Закон “Про вибори народних депутатів України”, (Відомості Верховної Ради (ВВР) 1993, N 48, ст. 455 ).
Закон Про внесення змін до частини дев'ятої статті 23 та частини четвертої статті 36 Закону України “Про вибори
народних депутатів України” ( Відомості Верховної Ради (ВВР), 1995, N 31, ст.245 ).
52 Закон “О выборах народных депутатов Украины”, 1997-09-24, N 541/97-BP, Урядовий кур'єр вiд 1997-10-25.
53 Закон “Про вибори народних депутатів України”, Верховна Рада України (ВРУ), N 2766-III, 2001-10-18, Урядовий
кур'єр № 201 вiд 2001-11-02 стор.3.
54 Закон “О выборах народных депутатов Украины”, 1997-09-24, N 541/97-BP, Урядовий кур'єр вiд 1997-10-25.
55 Про внесення змін до Закону України “Про вибори народних депутатів України” N 2777-IV, 2005-07-07,
(Відомості Верховної Ради України (ВВР), 2005, N 38-39, ст.449).
50
51
38
the group of medium-high PFR. Although the limits on campaign total income have been abrogated, the
problems regarding donations persisted.
While the upper donation limit for physical persons was significantly raised, having been fixed at
400 MMW (about $ 27.6 thousand), the problem with corporate donations was not solved and the
backdoor for such contributions was preserved in the 2005 elections law. Furthermore, unlike previous
regulations, the law explicitly stipulated that party/electoral coalitions own resources transferred to their
election fund are not subject to any restrictions in terms of frequency or amounts (Art. 53). De facto,
this provision rendered any control mechanism on donations meaningless, particularly due to the lack of
any restrictions on donations for the party regular activity. The vagueness of regulatory framework was
noticed by OSCE and Venice Commission, which recommended to clarify and expand regulations
concerning the sources and amounts of financial contributions. 56 Yet these provisions were still in place
in the 2011 new law on people’s deputies. The only innovation was the introduction of lower donation
caps (20 MMW – about $ 2500) from individuals to candidates running for office in SMD due to another
change of electoral system back towards a mixed one (Art. 1).57 Nevertheless, even in this case there were
no limits on candidate’s personal funds used for campaigning (Art. 50). The same rule applied to parties’
own financial means transferred to their election fund, while the limit on individual contributions
surpassed the $ 55 thousand threshold due to increase in MMW.
Although Ukraine’s experience is not unique, it vividly illustrates the fragility of campaign
financing rules and the unwillingness of political actors to confine themselves with regard to funding
sources. Even when regulations towards campaign limits became much more permissive, hence allowing
parties and to lesser extent candidates to rely on large donations, their reluctance to cancel legislative
loopholes rendered existing legal framework ineffective and hardly enforceable.
3.5. High restrictive cases
High restrictive financing regimes place limits on both types of income, i.e. donations and total
campaign income. Yet within this type there are several cases that exhibit extreme values in
restrictiveness.
Extreme cases
These cases are found in four ex-soviet republics Turkmenistan, Belarus, Uzbekistan and
Tajikistan. Among these four, Turkmenistan represents a special case since there was no political
opposition and there were no competitive elections, at least formally. The other three countries
imposed various restrictions on alternative financing sources during election campaigns. The first
Opinion No. 338/2005: CDL-AD (2006)002, Opinion on the Law on Elections of People’s Deputies of Ukraine. The
Venice Commission and OSCE/ODIHR, pp. 10, 22.
57 Закон Про вибори народних депутатів України No 4061-VI, 2011-11-17, (Відомості Верховної Ради України (ВВР),
2012, N 10-11, ст.73).
56
39
parliamentary elections in Belarus were held in 1995 using the old (1989) but updated (1994) law on
elections of deputies for the Supreme Council.58 The law however completely prohibited direct and
indirect participation of any kind of domestic and foreign entities in election financing of candidates for
deputies. Available election funds, administered by CEC, were to be evenly distributed among
candidates and spent according to the rules set out by the CEC (Art.12). In the same vein, the law on
elections to Majlisi Oli (Parliament) of Tajikistan prohibited any financial and material assistance in the
organization and holding of elections from other sources than state budget (Art.9).59 Similar provisions
were incorporated in Uzbekistan’s election law of deputies to Oliy Majlisi (Parliament). Any other nonstate financial means provided to support election campaign of candidates to deputies were explicitly
forbidden. Nevertheless, physical and legal entities, including political parties, public associations and
businesses that expressed their willingness to provide assistance in organizing elections could do so by
transferring financial resources to the CEC. The use of these resources, however, was at the full
discretion of electoral body (Art.49).60
Complete ban on the use of private financing during election campaign actually meant that the
opposition parties were completely deprived of possibility to compete on equal footing with incumbents
given the access of the latter to administrative resources and control of the media. Moreover, under such
circumstances, even the opposition access to alternative sources of private funding would have become
irrelevant since it could not use it to wage an election campaign. This also makes almost meaningless
financing regulations pertaining to the regular party operation. Why would a political party strive to secure
financing if it cannot use it to competing for political power? Except Turkmenistan, in all other cases
within this type political parties could theoretically accumulate large financial means since party funding
regulations did not envisage any limits either on contributions or aggregate annual income. However, the
nature of electoral rules on funding rendered this option unfeasible.
The ranks of highly restrictive regimes became thinner after almost two decades from the
outset of transition. Two out of four highly restrictive regimes liberalized their rules on election
financing. Only Turkmenistan and Uzbekistan preserved this status without passing any legislation that
would change the terms regarding election financing. Uzbekistani election law of deputies to Oliy
Majlisi before the 2009 parliamentary elections preserved untouched the provisions regarding private
financing sources. Although any private money supplied to assist electoral candidates was definitely
banned, individuals, businesses and other entities still had the possibility to support the organization of
Закон Республики Беларусь от 27 октября 1989 г. №2919-XI “О выборах депутатов Верховного Совета
Республики Беларусь” (СЗ БССР, 1989 г., N 31, ст.316; Ведомости Верховного Совета Республики Беларусь, 1995 г.,
N 1-2, ст.3).
59 Закон Республики Таджикистан от 1 декабря 1994 года “О выборах в Маджлиси Оли Республики Таджикистан”,
(Ведомости Верховного Совета Республики Таджикистан, 1994 г., №23-24, ст.444.
60 Закон Республики Узбекистан “О Выборах в Олий Мажлис Республики Узбекистан” (Ведомости Верховного
Совета Республики Узбекистан, 1994 г., № 1, ст. 6.
58
40
elections by contributing to CEC electoral fund managed at its sole discretion (Art.49). 61 There were no
changes, alike, with respect to Turkmenistan’s electoral rules on financing. The brand new edition of
law on elections of deputies before the 2008 parliamentary elections foresaw that campaign expenses
for the organizing and holding elections of deputies to Mejlis were to be fully covered by the state and
administered by the CEC (Art.8).62 Needless to say that the legal setup allowing political pluralism was
still completely missing while political opposition was banned.
On the other hand, Belarus and Tajikistan relaxed their legal framework concerning private
financing of elections thus joining the group of high restrictive regimes. Tajikistan passed several decisive
amendments to the 1999 parliamentary elections law in 2008. As result, parties and candidates were
allowed to use financial resources from private sources being subject to both kind of restrictions –
donation caps and caps on total campaign revenue.63 Likewise, Belarus undertook a thorough revision of
its 2000 electoral legislation in 2010 by introducing new provisions on election financing of presidential
and parliamentary candidates. In addition to public funding, candidates for deputies were permitted to
amass financial resources from physical and legal persons as well as to use their own funds. 64
I analyze the substance of these new provisions in a comparative fashion with other cases from
the same restrictiveness type.
High restrictive cases
Except cases that fully prohibited income from private sources, Bulgaria is the only country that
put extremely harsh legal constraints on party and candidate financing from the very beginning of
transition. For the first parliamentary elections following the collapse of communist regime in 1990, the
legal framework fixed the upper limits on donations for individuals and legal entities at 100 (US $ 15)
and 2000 (US $ 290) Leva respectively, while the maximum limits for total campaign income were
established at 20 thousand (US $ 2900) Leva per candidate (Art. 53). 65 Very soon, however, contribution
limits were removed while the limits on total campaign income were lifted up to 30 thousand Leva per
candidate.66 In this respect Bulgaria shifted from a high restrictive regime that survived roughly one year
Закон Республики Узбекистан “О Выборах в Олий Мажлис Республики Узбекистан” (Ведомости Верховного
Совета Республики Узбекистан, 1994 г., № 1, ст. 6; Ведомости Олий Мажлиса Республики Узбекистан, 1998 г., № 3,
ст. 38; 1999 г., № 9, ст. 206; 2000 г., № 5-6, ст. 153; 2003 г., № 9-10, ст. 132).
62 Закон Туркменистана от 10 октября 2008 года № 210-III “О выборах депутатов Меджлиса Туркменистана”.
63 Конституционный Закон Республики Таджикистан “О выборах Маджлиси Оли Республики
Таджикистан”(Ахбори Маджлиси Оли Республики Таджикистан 1999 год, № 12, ст. 296; 2004 год, № 7, ст.451;
2007год, №5, ст.352; 2008 год, №10, ст.797).
64 Закон Республики Беларусь от 04.01.2010 №99-З “О внесении дополнений и изменений в некоторые законы
Республики Беларусь по вопросам проведения выборов и референдумов” и о признании утратившим силу Закона
Республики Беларусь “О Центральной комиссии Республики Беларусь по выборам и проведению республиканских
референдумов”.
65 Закон за избиране на Велико Народно събрание Обн., ДВ, бр. 28 от 6.04.1990 г., в сила от 6.04.1990 г., попр., бр.
29 от 10.04.1990 г., доп., бр. 24 от 13.03.2001 г., изм., бр. 45 от 30.04.2002 г.
66 Закон за избиране на народни представители, общински съветници и кметове. Обн., ДВ, бр. 69 от 22.08.1991 г., в
сила от 22.08.1991 г. Сборник закони - АПИС, кн. 9/91 г., стр. 50; кн. 12/91 г., стр. 131; кн. 4/97 г., стр. 8 том I/91 г.,
стр. 55 (редакция от 22.08.1991 г.).
61
41
(June 1990 – October 1991) to a medium-low one that lasted till 2001 when new provisions on
contribution limits and total campaign have been established by a new parliamentary elections law (Art.
71-72).67 Bulgaria stands out by having instituted for the first democratic elections the most restrictive
contribution caps. Under such constraining conditions each candidate running for office in a SMD would
have needed the support of 10 corporate sponsors or 200 individuals to finance election campaign,
provided that the upper spending limit would have been reached. For a political party that would have
filled a list for multi-member constituencies and would have put forward candidates to cover all other
200 single-member districts it would have needed at least 400 corporate sponsors or roughly 80 thousand
individuals to fund its campaign. It appears that financing requirements for the first democratic electoral
experience were too harsh and they were quickly abolished already in subsequent elections by freeing
parties and candidates from such a burden. For the sake of comparison, Romanian parties become
constrained by the requirements of contribution limits and caps on total income amassed from donations
only at their third election campaign in 1996. It seems that previous experience played out its role in
laying down a much more convenient legal framework on donations. Even for the entire 1996 election
year the total income accrued from private contributions would have required only 50 corporate donors
or 250 individuals to reach the maximum annual limit of about US $ 608 thousand.
Finally, the most numerous group is represented by cases belonging to high restrictiveness type.
As one could notice at the beginning of this chapter, roughly two thirds of post-communist polities had
enacted harsher rules on campaign funding after almost two decades since the outset of transition.
Because these cases constitute the majority, I will assess them across all three indicators: donation caps,
limits on campaign total income and the size of donors’ network, i.e. the minimum number of donors
needed to reach the upper threshold on campaign spending. This gives us a clue about the incentive
structure of fundraising, that is, whether electoral subjects are induced to accrue financial resources from
a large pool of potential donors or legal arrangements are designed in a way that, actually, motivates them
to focus on a narrow group of wealthy sponsors. We noticed that for party regular activity the incentive
structure concerning the size of donors’ network was quite permissive even for those cases that belong
to high restrictiveness type. Elections offer a better opportunity to substantiate this finding since the
number of cases is significantly higher compared to regular funding. Though I focus my analysis only on
two of these indicators, namely the maximum level of donations and the size of donors’ network, I use
the levels of campaign total income precisely to estimate the size of donors’ network.
Data on contributions shown in table 10 provides a summary statistics on donations from
physical and legal persons. We can observe a huge variation regarding both categories of donors.
67
Elections of Members of Parliament Act. Promulgated State Gazette No. 37/13.04.2001.
42
Table 10: Summary statistics on donations from physical and legal entities for countries
belonging to high restrictiveness type 2007-2011 (US $)
Number of cases
Mean
Std. Dev.
Minimum
Maximum
Limits on donations:
21
18327
26956
60
120125
physical entities
Limits on donations:
17
97979
202883
120
839570
corporate entities
Source: Author’s own calculations
Note: Croatia, Georgia and Ukraine that belong to the medium-high regime are also included.
It ranges from the lowest level of US $ 60 for individuals in Belarus to the highest level of US $
120 thousand for individual contributions in Moldova. For the corporate donations, the range is even
higher. Belarus is located again at the lower tail of distribution with a donation value of 120 $ for business
contributions to candidates’ election funds, while Russia is placed at the upper distribution tail as a glaring
outlier with a maximum level reaching almost US $ 840 thousand to party headquarter. Such a high
variation clearly indicates that looking only at the lack or the availability of contribution limits is
misleading since very high levels of donations such as epitomized by Russia might be regarded as closer
to a PFR that does not set up any donation caps on businesses. Figure 19 and 20 range post-communist
polities based on the maximum levels of contributions set up for physical and legal entities respectively.
As already hinted by summary statistics, we can notice a striking variation regarding the upper donation
levels.
Figure 19: Maximum donation levels from physical entities for high restrictive cases
2007-2011 (US $)
BY
TJ
KG
ME
AZ
AM
BA
RS
MK
PL
BG
AL
LT
SI
RU
GE
HR
LV
RO
UA
MD
60
800
2140
2650
3730
4000
4300
4700
6970
7011
7100
11920
16500
16600
16790
16830
17000
0
33350
44000
48300
50000
120125
US $
100000
150000
Source: Author’s own elaboration
Note: Croatia, Georgia and Ukraine belong to the medium-high restrictiveness regime.
43
These two graphs yield several interesting results. Russia, Moldova Croatia and Romania display,
by far, the highest levels on corporate donations. Georgia, Azerbaijan and Serbia also record quite high
donation levels but significantly lower than the first group. The variation remains high even among those
countries recording the lowest donation levels. Another important issue: albeit corporate donors are, on
average, advantaged in relation to individual contributors, the upper levels for individuals are quite high
in some countries. Moldova is a clear leader in this respect but Romania, Ukraine and Latvia also record
high donation levels for physical entities. In Ukraine and Latvia such high levels might be explained by
the complete ban on campaign donations from legal entities, so as to compensate for this confinement.
In the same fashion, Estonia passed in 2003 an amendment to party law prohibiting corporate donations
but there were no limits whatsoever on private contributions from individuals. 68 On the other hand, we
observe Poland and Bulgaria that also banned corporate donations but the maximum level on donations
is considerably lower amounting to slightly more than US $ 7 thousand in both cases. Poland introduced
the ban on corporate donations already in 2001 (Art. 25) 69 while Bulgaria followed suit much later, in
2009 (Art. 24).70
Figure 20: Maximum donation levels from legal entities for high restrictive cases 20072011 (US $)
BY
TJ
BA
KG
AL
AM
ME
LT
SI
MK
RS
GE
AZ
RO
HR
MD
RU
120
4000
8100
10700
11920
12000
13250
16500
16600
27900
47000
56100
62240
110000
189400
240250
839570
0
200000
400000
US $
600000
800000
Source: Author’s own elaboration
Note: Croatia and Georgia belong to the medium-high restrictiveness regime.
Political Parties Act, passed 11 May 1994, (State Gazette, I 1994, 40, 654), entered into force 16 June 1994, amended by
the following Acts: 18.12.2003 entered into force 01.01.2004 - State Gazette I 2003, 90, 601.
69 The Act of 27th June 1997 On Political Parties, Dziennik Ustaw of the Republic of Poland No. 98, item 604 (unified text:
Dziennik Ustaw of 2001, No. 79, item 857), amended: Dziennik Ustaw of 2001.
70 Bulgaria: Political Parties Act (as amended by State Gazette No. 6 2009).
68
44
This overview with regard to limits on private contributions for cases belonging to high
restrictiveness type revealed a huge cross-country variation concerning regulatory practices in postcommunist space. Even if the majority of them endorsed similar legislation aimed at limiting money flows
from private interests into party and candidate election funds, it is quite difficult to notice a clear
convergence pattern due to very high disparities towards the upper donation levels.
The size of donors’ network
I turn now to the second feature of high restrictiveness cases, namely the size of donors’ network.
As already mentioned it reflects the fundraising efforts an electoral competitor has to deploy to
reach the upper campaign limit.71 Hence, the minimum number of donors necessary to reach the upper
campaign threshold is a good proxy to gauge whether electoral contestants are prompted to disperse their
energy to reach a larger pool of potential sponsors or to concentrate their efforts on a narrow pool of
wealthy donors. So far we could notice that regulations on financing party regular activity were devised
in a rather permissive way, allowing political parties to extract large amounts from affluent donors
without any need to develop and maintain a fundraising mechanism based on grassroots funding. Yet,
the number of cases falling into the pool of the most constraining PFR was too small to generalize this
finding, although we could also notice that legislative amendments in those countries that were
encapsulated by the high restrictiveness type did not alter financing regime so as to induce political parties
to expand their donor network.
Given higher stakes implied by elections, the regulations of campaign financing offer a better
possibility to explore this direction of inquiry. Financing rules on private contributions and campaign
total income became more dense and elaborated compared to financing provisions on party regular
activity in many post-communist polities. Accordingly, it is not surprising that roughly two thirds of them
are belonging to high restrictiveness type. Despite of the huge variation among countries towards the
maximum donation levels, the small size of donors’ network represents a common feature of the majority
of cases recording a high restrictiveness degree. Albeit cross-country variation on this indicator is
relatively high, in the main, it mirrors the pattern identified for party regular activity. Table 11 shows how
many individuals or corporate donors are necessary to reach the upper limit of campaign spending,
provided that every donor provides the maximum amount permitted by law.
With the exception of Azerbaijan and Belarus, there is clear evidence that the interaction of
campaign rules on contribution limits and limits on total campaign income yields quite a narrow pool of
donors necessary to finance elections. Even if one controls for the size of electoral market, in terms of
registered voters, what comes out is only a different ranking of countries, without affecting the underlying
incentive structure of campaign financing regulations, i.e. reliance on large donations.
It by no means implies that electoral competitors will necessary reach the limit. It depends on the threshold’s value and
the extent to which it reflects the actual demand for financial resources in a concrete election campaign.
71
45
Table 11: The size of donors’ network for high restrictive cases
Political Party
Individual Candidates
Country
Elections Network size
Network size Network size Network size
year
of individual
of corporate
of individual of corporate
donors
donors
donors
donors
Moldova
2010
9
5
1
1
Latvia
2008
19
banned
1
banned
Slovenia
2007
60
60
1
1
Bulgaria
2009
100
banned
20
banned
Lithuania
2008
106
106
2
2
Bosnia &
2010
148
79
4
2
Herzegovina
Montenegro
2009
170
34
Serbia
2010
200
50
Tajikistan
2010
200
40
10
5
Macedonia
2011
210
105
2
1
Romania
2012
400
200
1
1
Kyrgyzstan
2010
500
100
Armenia
2010
1200
400
100
33
Russia
2011
1429
29
Poland
2007
1555
banned
4
banned
Azerbaijan
2010
20833
1250
167
10
Belarus
2010
22000
11000
200
100
Source: Author’s own calculations
Moreover, if we take into consideration public funding provided for organizing elections and own
financial resources deployed by parties and candidates, besides donations, then the pool of potential
donors shrinks further. The majority of CEE countries, except Latvia and Moldova, provided state
subsidies for election financing, whereas Caucasus and Central Asia republics and Russia allowed parties
and candidates to contribute with large amounts to their own election funds.
The resemblance and proximity of high restrictiveness cases on this dimension still hides a large
variation among cases when controlling for the size of electoral market. This variation is well captured
by figures 21 and 22, which reflect, what I label, the representativeness of the donors’ network for
constituency.
Y-axis represents the ratio between the number of registered voters and the number of physical
persons needed to reach the maximum level of campaign aggregate income and provides an
approximation of how many voters are covered by a single donor. X-axis performs the same function
but applied to legal entities. In fact, this indicator reflects the propensity of a given PFR to make it easier
or more difficult for parties to collect resources for campaigning. As we move from the bottom-left
corner towards the upper-right corner, a financing regime becomes friendlier towards electoral subjects
since it requires fewer efforts to reach potential contributors.
46
300000
100000
200000
MDA
LVA
BGR
RUS
ROU
SRB
SVN
LTU
BIH
POL
TJK
MKD
KGZ
MNE
ARM
BLR
AZE
0
physical entity / number of registered voters
Figure 21: The relationship between the size of donors’ network and the size of electoral
market
0
1000000
2000000
3000000
legal entity / number of registered voters
4000000
Source: Author’s own elaboration
physical entity / number of registered voters
0
20000
40000
60000
80000
Figure 22: The relationship between the size of donors’ network and the size of electoral
market (without Moldova and Russia)
LVA
BGR
ROU
SRB
SVN
LTU
BIH
POL
TJK
MKD
KGZ
MNE
ARM
BLR
AZE
0
50000
100000
legal entity / number of registered voters
150000
Source: Author’s own elaboration
47
I dropped Russia and Moldova from figure 22 since they are marked outliers and as figure 21
shows these two cases strongly skew the results.72 Furthermore, Russia’s legislation provides for
additional provisions referring to party regional branches aimed at facilitating fundraising. The 2005
Duma elections law authorized legal entities to contribute up to 50% to the total campaign income to
electoral fund of party regional branches (Art. 64/4), meaning that two corporate donors would have
sufficed to cover all campaign expenses.73
Albania is another case that fits high restrictiveness type but misses from our analysis. It shifted
from a low to a high restrictiveness regime only in 2005 when limits on donations and total campaign
income have been introduced. Yet, it is impossible beforehand to estimate the size of donor’s network
for Albanian electoral competitors since it varies from one campaign to another conditional on the
amount of public funding allocated to electoral contestants. Electoral legislation amended in 2005 capped
donations from individual and legal entities at ALL 1 million (about US $10.260 for the 2009 electoral
campaign), but tied the upper limit of campaign income to the amount of state subsidies. Accordingly,
campaign total income for each party, including its candidates, could not exceed tenfold the largest
amount received by a party from the state budget for electioneering. For individual candidates the
maximum limit on campaign spending was fixed at 50% from the same amount (Art. 144, 145). 74 Election
financing rules of Serbia and Montenegro imposed similar restrictions on total campaign fund based on
the amount of state subsidies.75
These results have to be interpreted with caution, given the fact that they do not account for
public funding and competitors’ own resources poured into campaign coffers. However, as already
hinted, incorporation of such data would reinforce even more the underlying pattern of financing rules
featured by high restrictiveness cases. There is another striking paradox: irrespective of huge variation in
donation thresholds or upper limits on campaign total income, their interaction yields similar results.
Two other cases represent the best illustration of such an outcome. Belarus and Azerbaijan score
the highest values regarding the size of donor’s network but they are highly contrasting regimes with
respect to limits on contributions and campaign spending. For instance, the size of donors’ network is
so large for Azerbaijan because it is driven by an extremely high levels of the total campaign income
(AZN 500 thousand) for individual candidates elected in SMD and relatively low donation levels from
individuals (AZN 3000). For the 2010 parliamentary campaign, this amounted to roughly US $ 620
The ratio registered voters/individual donors and registered voters/corporate donors for Moldova is 1/303.855 and
1/546.940, while for Russia the ratio is 1/76.443 and 1/3.766.820.
73
Федеральный закон от 18.05.2005 N 51-ФЗ “О выборах депутатов Государственной Думы Федерального Собрания
Российской Федерации”, Принят Государственной Думой 22 апреля 2005 года.
74 The Assembly Law No 9087, dated 19.6.2003 amended by the law nr. 9297 dated 21.10.2004 and by the law no. 9341,
dated 10.1.2005 The Electoral Code of the Republic of Albania.
75 Montenegro and Serbia adopted a rather sophisticated scheme by restricting total campaign income from private sources
using a two-step procedure. First, 20% of public funding allocated for elections were to be equally distributed among all
registered competitors. Then, the upper limit would be established as twenty fold the amount calculated in the first stage.
72
48
thousand per candidate and about US $ 3.7 thousand on contribution from physical entities. This is 50
times more than the upper level of campaign income for a Belorussian candidate who could spend about
US $ 12 thousand for the same purpose in 2012 parliamentary contest, but would have needed to reach
almost the same number of potential donors to gather this money since the maximum contribution of
an individual could not exceed US $ 60.
3.6. Conclusion
Unlike party regular activity, the development of campaign funding regulations followed a
different path in terms of pace and magnitude of change. The financing of election campaigns became
much quicker the regulatory target of post-communist politicians. As figure 23 shows, already during
late ’90 the number of elections held under more restrictive regimes outnumbered the elections organized
under more liberal regimes. With few exceptions, the majority of these countries enacted tighter
regulatory provisions concerning private contributions and limits on aggregate income. After two decades
of transition only three of them were in a state of low restrictive regimes without imposing any
quantitative restrictions either on private contributions or on the campaign total income. Other two
countries still prohibited private financing of elections, while the rest imposed one or another form of
restrictions. The majority of them, however, endorsed both kinds of rules aiming at a better control over
the origin and amount of donations, on the one hand, and the cost of elections, on the other hand.
Notwithstanding differences with party regular activity concerning intensity of regulations, the
nature of regulatory changes was not qualitatively different. Despite of quite striking cross-country
differences regarding the upper contribution levels and the maximum levels of campaign aggregate
income, in the majority of cases, election funding regulations have been tailored in a very friendly manner
towards electoral competitors. Their interaction yielded a similar incentive structure as for regular
funding, thus generating favorable conditions for political parties to resort to large donations instead of
grassroots financing.
49
11
10
9
8
7
6
5
4
3
2
1
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Number of elections per year
Figure 23: Overtime distribution of restrictiveness regimes for election campaign
activity 1990 – 2012
low
high
medium-low
extreme-high
medium-high
50