Donations to Political Parties: Investing Corporations and Consuming Individuals?

Abstract

Summary What motivates donations to political parties? Two views prevail. Donors are perceived either as ideologically motivated consumers or as privilege‐seeking investors. To investigate differences in donor motivation between corporations and individuals, we analyze data from Germany. For the period from 1994 to 2014, we find that corporations act more like investors than individuals do. First, we test whether corporations or individuals are more inclined to give more to incumbent parties than to parties outside the governing coalition. Giving to incumbent parties whose representatives hold public offices may be more attractive for investing donors. Second, we test for differences between corporations and individuals in the relative increase in donations from non‐election years to election years. Investor donations may be more volatile than consumer donations. We find that only corporations donate more to incumbent parties and that corporations increase their party donations from non‐election years to election years more than individuals do. These differences in the behavior of corporate and individual donors provide some evidence for potentially undesirable exchanges between corporations as investors and parties. Further, the differences between individual and corporate donors tend to be more consistent for parties to the right on the political spectrum.

The Kindness of Strangers? An Investigation into the Interaction of Funder Motivations in Online Crowdfunding Campaigns

“…(). This line of evidence is in many respects consistent with the view of donations as a form of individual consumption (Fink, ).…”

“…The incentivising effect of material incentives such as lottery tickets and symbolic rewards on blood donation is also documented in Costa-Font et al (2013), Goetter & Stutzer (2008 and Lacetera et al (2009). This line of evidence is in many respects consistent with the view of donations as a form of individual consumption (Fink, 2017).…”

Financing party branches: Evidence from the German federal system

“…This theoretical claim has found support in empirical studies, showing that governing parties tend to enjoy higher incomes than opposition parties (Fink 2017;Lösche 1993). Furthermore, business donations have been found to be influenced by power status at the state level: Fink (2017), analysing private and business donors' spending patterns in the German states, showed that only corporate donors tend to give more to governing parties than to opposition parties.…”

Party fragmentation and campaign spending: A subnational analysis of the German party system

“…For one, similarly to the incumbency effect in elections, governing parties may be more salient in the political debate, whereby they might be more likely to attract citizens’ attention than political actors on the opposition benches. Moreover, business actors could support the governing party also financially because they seek to maintain ties to the government, combined with the expectation of having access to the policy-making process to facilitate conducive policies for the business sector (Fink, 2017).…”

“…There is also evidence that government parties receive more donations than opposition parties (Fink, 2017;Lo ¨sche, 1993: 222). For one, similarly to the incumbency effect in elections, governing parties may be more salient in the political debate, whereby they might be more likely to attract citizens' attention than political actors on the opposition benches.…”