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Election campaign finance bans and corruption: effectiveness across parliamentary and presidential democracies

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Abstract

Using data on a large sample of nations, this research studies the effects of campaign finance reforms on corruption, including bans on contributions by trade unions and corporations. The focus on campaign finance bans in presidential versus parliamentary democracies is a unique aspect. We find that, while bans on campaign donations to political parties and candidates by trade unions are effective in reducing corruption, their efficacy varies across presidential and parliamentary democracies. Specifically, bans on campaign contributions to political candidates and parties reduce corruption in presidential democracies, but they are ineffective in parliamentary democracies. Campaign contribution bans on corporations are largely ineffective. When a broader measure of institutional quality/enforcement is considered, its effectiveness dominates the effects of individual bans. Some of these findings are unique and suggest that policymakers considering combating corruption should take into account the form of democracy, the type of campaign finance ban, and the nation’s overall institutional quality.
Vol.:(0123456789)
Constitutional Political Economy
https://doi.org/10.1007/s10602-024-09447-y
ORIGINAL PAPER
Election campaign finance bans andcorruption:
effectiveness acrossparliamentary andpresidential
democracies
RajeevK.Goel1,2,3· MichaelA.Nelson4
Accepted: 31 July 2024
© The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature
2024
Abstract
Using data on a large sample of nations, this research studies the effects of campaign
finance reforms on corruption, including bans on contributions by trade unions and
corporations. The focus on campaign finance bans in presidential versus parliamen-
tary democracies is a unique aspect. We find that, while bans on campaign donations
to political parties and candidates by trade unions are effective in reducing corrup-
tion, their efficacy varies across presidential and parliamentary democracies. Spe-
cifically, bans on campaign contributions to political candidates and parties reduce
corruption in presidential democracies, but they are ineffective in parliamentary
democracies. Campaign contribution bans on corporations are largely ineffective.
When a broader measure of institutional quality/enforcement is considered, its effec-
tiveness dominates the effects of individual bans. Some of these findings are unique
and suggest that policymakers considering combating corruption should take into
account the form of democracy, the type of campaign finance ban, and the nation’s
overall institutional quality.
Keywords Corruption· Elections· Campaign contributions· Unions· Political
parties· Government· Presidential democracy· Parliamentary democracy
JEL Classification K42· D73· D72· K16
* Rajeev K. Goel
rkgoel@ilstu.edu
1 Illinois State University, Normal, IL61790, USA
2 Institute forStudies ontheMediterranean (ISMed)/National Research Council (CNR), Napoli,
Italy
3 Kiel Institute fortheWorld Economy, Kiel, Germany
4 Department ofEconomics, University ofAkron, 302 E Buchtel Ave, Akron, OH44325, USA
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