The spending behaviour of political parties. The expenses of the parties in nine European democracies

Money constitutes one of the most valuable resources for political parties, as it allows them to buy a variety of other resources, including staff, office space, and marketing materials, and consequently to fund all party operations and activities. Given the important role of money in politics, this issue has already received considerable attention in academic literature. Political finance research has been blooming in recent decades, examining among others the legal and regulatory aspects of political finance, the importance and impact of different sources of income, the role of campaign spending, and the risk of corruption.

There appears to be a blind spot in the literature on political finance, however, namely overall party spending. We hardly know to what extent or how parties spend their available financial resources. How much money do parties spend annually? How do they allocate their funds? Do they prioritize the maintenance of the party infrastructure or rather communication with the electorate? It is highly relevant to study these aspects of party finance: as political parties are not likely to voluntarily provide information on how they function, it is often difficult to analyze their internal organization. Examining party spending, however, allows us to gain an insight into a party’s organizational structure and its priorities. Based on official data from the parties’ annual financial statements, we make an in-depth assessment of four variables related to party spending: (1) the overall spending levels of political parties, (2) their staff expenses, (3) their expenses on organization versus on communication, and (4) their profit and loss figures.

As the availability of spending data, and consequently of the parties’ financial statements, is an essential precondition for this research, in Chapter 1 we first examine the regulatory framework related to these party accounts. Five indicators are analyzed: (1) the obligation of parties to submit their accounts, (2) the availability of a standardized form, (3) the obligation to make the accounts public, (4) the independence of the auditor, and (5) the independence of the monitoring body. We more specifically examine the impact of the Third Evaluation Round of the Group of States against Corruption (GRECO) on these elements in 18 Northern, Western, and Southern European states. We find that, in recent years, several countries have amended their legal framework as a response to GRECO’s recommendations.

Chapter 2 focuses on the overall annual spending levels of political parties. Based on data from nine countries and applying an ‘index of political spending’, we find that the parties’ spending levels have not systematically increased over the past decade. At the party level, spending levels increase with party strength and party age. At the country level, spending levels are higher in countries with a longer tradition of public funding, a higher effective number of parties in the party system, a shorter democratic tradition, and a lower number of registered voters. Also, they are higher in election years.

In Chapter 3, we examine one specific type of party spending, namely staff expenses. We in particular study the parties’ relative staff expenses, this is the amount of staff expenses as a share of total annual expenses, on the basis of data from seven countries. At the party level, we find that relative staff expenses are higher among left-oriented parties and that they increase with party age, party membership figures, and the duration of government participation. They decrease with party income. At the country level, relative staff expenses decrease with the effective number of parties in the party system and they are lower in election years.

In Chapters 4 and 5, the spending behavior of political parties is investigated. In this context, we develop a two-dimensional framework. The first dimension relates to the profit and loss figures of parties, on the basis of which we distinguish between saving and spending parties. The second dimension relates to parties’ spending patterns, which allows us to distinguish between apparatus-oriented and election-oriented parties. While this framework is applied to the case of Belgium in Chapter 4, the analysis is expanded to four additional countries in Chapter 5. Both studies show that, in the long run, most parties can be considered as apparatus-oriented saving parties.

In sum, by studying party spending based on official data from the parties’ annual financial statements, this research provides a useful contribution to the existing literature on both party finance and party organizations, as it allows us to better understand political parties, their finances, their internal organization and structures, and their priorities.