In their 2019 paper “Typologies of Party Financing Systems,” political scientists David Wiltse, Raymond La Raja, and Dorie Apollonio outlined four main types of party financing based on an analysis of more than 120 countries around the world. The first is a market-based model in which the law allows almost any individual or legal entity, including corporations, to pay any amount. However, the price here is full transparency of expenditure and amounts transferred to the account – parties must submit detailed financial reports that are publicly available. In some cases, voters can even check for themselves who is financing a particular politician. The political scientists included selected African countries (South Africa, Nigeria, Angola), developing countries (India, Indonesia, Ukraine), tax havens (Estonia, the Netherlands, Ireland), and, perhaps surprisingly, northern Europe (Germany, Norway, and Sweden).
The second, more popular type is the public utility model, which features high transparency and restrictions on payments. Parties here are supported largely by public money, and the possibility of using private sources is limited – donations cannot be made, for example, by people permanently living abroad or by companies. There are also deposit limits. This system has been chosen by the vast majority of EU members.
