This article aims to explain the deviant German case of an early and comprehensive regulation of party donations (combining a high level of transparency and incentives for small donations). Given the limited explanatory power of economic and institutional factors, the article emphasises the causal role of ideas for a policy stabilisation which occurred after 1993. A process-tracing analysis suggests that the 1983–1993 reform period was characterised by a conflict of ideas. During this conflict, ideas regarding undisclosed donations as an anti-democratic interference with democratic political competition came to prevail over ideas regarding all donations as a necessary condition for democratic competition irrespective of their regulation. The key actors in this conflict were, on the one hand, the new Green party which resuscitated the idea of donations being potentially anti-democratic and, on the other hand, the Constitutional Court which ultimately endorsed this ideational legacy promoted by the Greens. After 1993, donations in Germany came to be accepted as a necessary evil whose anti-democratic potential had to be limited by transparency obligations and incentives for small donations. The findings presented here suggest that policymakers need to link attempts to regulate party donations to ideational legacies (if available) to successfully tackle political corruption.

Studies of party system size have looked at institutional and sociological factors in their attempt to explain what determines the number of parties. While some recent studies contend that party laws, beyond the district magnitude, have a significant impact on, among others, new party entry, we know very little about whether certain rules matter more in some societies than they do in others. In this paper, we study the extent to which various party finance rules affect party system size and differentiate the effect between new and established democracies. Specifically, we focus on direct and indirect public subsidization and limits on private donation and campaign expenditure. We hypothesize that compared to established countries, new democracies tend to have a larger party system size when the political finance rules create more equal conditions for electoral competition. Using data from 43 Europe democracies, the empirical analyses support our hypothesis.