The paper focuses on regulation of private funding of political parties and political connections established through private donations to parties. More specifically, it analyses the impact of transparency measures on party corruption, in particular on undue influence, in Croatia and Serbia after the 2011 regulatory framework reform. Both countries, according to GRECO, have complied with the highest standards and best practices in political financing regulations, including the transparency requirements. Making the information on received and spent money publicly available should help expose and punish undue influence over politicians. Transparency of party financing is expected to decrease the space for ‘black money’ and buying influence. The question that remains is: what is the impact of those measures on undue influence in practice?
The paper is based on in-depth interviews and structured scenario discussions with relevant stakeholders, including actors directly involved in the political financing (members of political parties and oversight bodies), as well as indirectly by studying or analysing political financing (CSO and academic experts, as well as journalists who cover the topic). As anticipated, the findings indeed suggest ‘cleaner’ reports and party financing in general, as well as enhanced oversight. However, what is also indicative is a shift to private exchanges rather than transactions through party accounts, as well as a decrease of private contributions share overall. The transparency measures closed some of the usual corrupt money channels – but certainly incentivised some others and changed the form of corrupt practices – which often goes beyond party financing regulation.
The paper also outlines several unintended consequences and ways in which parties defy the spirit of the law by exploiting the loopholes. The findings have implications relevant not only for party financing regulation, party corruption and its changing form, but also for the existence of smaller parties, party competition and party systems.
Keywords: party financing regulations, transparency, disclosure, party corruption, undue influence, political parties
