Private sponsorship used to be the normal way of funding political activity in western democracies. Nowadays, however, public subsidies to political parties have become a necessity, for there is no other way to bridge the permanent gap between voluntary giving for political purposes and established functions of political parties. Experience with political corruption and unequal opportunities has contributed toward the proliferation of public subsidies.

Although public subsidies to political parties have already become a traditional feature of quite a few western democracies, important changes of regulation by law or agreement have been implemented recently. This chapter presents a comparison of party and campaign finance (including public subsidies, their legal framework and their impact) in four European countries. Resulting from comparative research in Austria, Italy, Sweden1 and West Germany it tries to evaluate:

1. different techniques of subsidizing political parties with public funds;

2. effects of these subsidies on the internal structure of parties and on party competition;

3. controls of party income and expenditure by legal restriction or disclosure and reporting to the public;

4. procedures applied to keep public subsidies at pace with inflation.

PERSPECTIVES OF COMPARATIVE RESEARCH

Since Arnold Heidenheimer and Alexander Heard started cross-national research on political finance, elaborate studies on campaign and party finance (both national and comparative) have focused their attention on a particular set of countries. With respect to political finance in the four countries covered by this chapter, there is more information available today than there was two decades ago; scientific studies have provided a lot of useful information and governmental regulations require periodic reporting on political money.