Follow the Money: External Constraints and Party Finance Reform in Sweden

Guest post by Jeffrey Ziegler

Election campaigns, such as the one currently taking place in Sweden, are an absolutely essential part of democracy, but they are also expensive. In this context, it is interesting to note that Sweden has had very few legal rules regarding political parties and their finances, a trend that differs from the general West European norm of extensive legislation.

During spring 2014, Sweden passed Law 2014:105 (om insyn i finansiering av partier), legally requiring political parties to publicly disclose both the amount and donor identity of donations over 20,000 SEK. Additionally, parties who do not comply with these regulations will not receive public funding. The new law has the potential to reshape how political parties and voters interpret funding practices, which in turn may alter political strategy and party function. But first, how did this reform occur?

Academic theory surrounding party finance reform, or electoral system reform generally, assumes changes are driven by preference-derived incentives, where political parties wish to maximize electoral outcomes or reluctantly trade electoral advantages for other goals within the national context (see Katz 2005, Nwokora 2012). Yet, Law 2014:105 presents an interesting case because the origin and motivation for its enactment was derived from an external, non-legally binding organization through a subgroup of the Council of Europe (Group of States against Corruption, GRECO). This unique feature sets the Swedish case apart and offers a compelling instance of how furthered community interactions at the European level impact national politics.

Prior to GRECO’s intervention, Sweden had a long history of purposefully avoiding regulations that monitored financial contributions to political parties at the national level. Since the mid-1960s, Swedish political parties have relied upon varying sources of income, with the bulk coming from state contributions (partistöd). However, the amount represented by private donations fluctuated greatly and by 1980, all five major parliamentary parties in the Riksdag mutually agreed to disclose their accounts with each other upon request (see Gidlund 2001). For the next thirty years, no formal legislation existed requiring the public disclosure of private donations for political entities, even when in 2010 only seven out of the eight parliamentary parties had agreed to the voluntary pact.

Distribution of party income by type (2008-2012). (Source: Partiernas intäktsredovisningar)

Distribution of party income by type (2008-2012)

In 1999, Sweden became one of the seventeen original members of GRECO and in early 2009, the discrepancy between community standards and Swedish national law was quite apparent in the first report of the third round published by GRECO (2012). Between 2009 and 2012, concerning the transparency of party finance, Sweden consistently made “no tangible progress” and received globally unsatisfactory ratings. Sweden’s non-compliance with GRECO recommendations throughout the early 2000s is best characterized by the notion of political autonomy and freedom. Previous attempts to enact restrictions on the form or the source of contributions (beginning with SOU 1951:56) came under fire from those who believed that since donations and support are so closely interconnected, the publication of donor identities inevitably would resemble a registry of political affiliation that would be prone to private, public, and political misuse. In the following years after GRECO’s reports, the unambiguous mention of GRECO’s influence in the new press for legislation (Allmänhetens insyn i partiers och valkandidaters intäkter, SOU 2004:22; Allmänhetens insyn i partiers och valkandidaters finansiering; Ds 2013:31) was obvious to many outside observers and was accordingly mentioned in critical responses (remissyttrande) that worried Sweden was failing to address constitutional concerns at the expense of pleasing outside entities (see Lunds Universitet Juridisk Fakulteten 2013, Stockholms Universitet Justitiedepartementet 2013).

The national debate that followed the initial government proposal (Ökad insyn i partiers och valkandidaters finansiering, Regeringens proposition 2013/14:70) played out similarly to how existing theories on strategic behavior could have predicted. The Social Democrats (Socialdemokraterna), coupled with the Green party (Miljöpartiet) and the Left party (Vänsterpartiet), created a public debate that the Conservatives (Moderaterna) felt they could not politically weather. Though previously and probably ideologically against the law, the Conservative members of parliament unanimously voted in favor of its passing, with the Sweden Democrats (Sverigedemokraterna) being the only party to vote against.

A number of close followers of the new legislation view it as merely a first step in a process of change due to potential loopholes it left unaddressed. The greatest consideration moving forward is that the law is only applicable to the national party apparatus; meaning local and regional levels of political parties do not have to abide by these new regulations. Moreover, local and regional levels still maintain the privilege to transfer funds within their own party without disclosing the original source of income. These concerns are also coupled with the fact that there is still only a basic definition for what a political party is and who must follow the rules on contribution limits, making it even more difficult to extend the provisions of Law 2014:105 to the local and regional levels. While these practical implications of the legislation are still yet to be seen, further “reforms” can be expected.

The legislative journey surrounding Law 2014:105 is notable on multiple fronts. It offers a foundational starting point for future reforms, while also attempting to meet community standards. Most important, party finance in Sweden is a case of “strong international influence” in an affluent Western democracy, something often neglected in the literature on party change and party funding.


Jeffrey Ziegler is currently a PhD student in Political Science at Washington University in St. Louis, focusing on comparative electoral systems. During the 2013-14 academic year, he lived in Sweden as a Fulbright grantee and worked at the Department of Political Science at Umeå University. He also wishes to extend a special thanks to the Fulbright Commission, Torbjörn Bergman, Johan Hellström, Daniel Walther and everyone at the department in Umeå who facilitated his work on Swedish party finance.


Sources:

Ds. 2013:31. Swedish Official Reports.

Gidlund, G., & Koole, R. (2001). Political Finance in the North of Europe: The Netherlands and Sweden. In K.-H. Nassmacher, Foundations of Democracy (pp. 112-130). Baden-Baden: Nomos Verlagsgesellschaft.

GRECO. (2012). Third Round Evaluation: Transparency of Party Funding. Strasbourg: Council of Europe.

Katz, R. (2005). Why are there so many (or so few) electoral reforms? In M. Gallagher, & P. Mitchell, The Politics of Electoral Systems (pp. 58-78). Oxford: Oxford University Press.

Law 2014:105 (om insyn i finansiering av partier).

Lunds Universitet Juridisk Fakulteten. (2013). Remiss: Allmänhetens insyn i partiers och valkandidaters finansiering (Ds 2013:31). Lund: Lund Universitet.

Nwokora, Z. (2012). The distinctive politics of campaign finance reform. Party Politics , 1–20.

SOU. 1951:56. Swedish Official Reports.

SOU. 2004:22. Swedish Official Reports.

Stockholms Universitet Justitiedepartementet. (2013). Remiss: Allmänhetens insyn i partiers och valkandidaters finansiering (Ds 2013:31). Stockholm: Stockholms Universitet.

Advertisements