The British party funding regime at a critical juncture? Applying new institutional analysis
| Published date | 01 May 2017 |
| Date | 01 May 2017 |
| Author | Sam Power |
| DOI | 10.1177/0263395716646390 |
| Subject Matter | Articles |
research-article2016
Article
Politics
2017, Vol. 37(2) 134 –150
The British party funding
© The Author(s) 2016
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regime at a critical juncture?
https://doi.org/10.1177/0263395716646390
DOI: 10.1177/0263395716646390
journals.sagepub.com/home/pol
Applying new institutional
analysis
Sam Power
Sussex Centre for the Study of Corruption, School of Law, Politics and Sociology, and Freeman Centre,
University of Sussex, Brighton, UK
Abstract
This article analyses the state of play regarding party funding reform in British Politics through
the application of new institutionalism. It then investigates whether the Collins Review of 2014
represents a critical juncture in the evolution of the political finance regime. Utilising elite interview
and documentary research, the article argues that the removal of a key institutional stumbling
block – the concession of the opt-in for trade union members of the Labour party – has created a
situation which may have a very real effect on both British party funding and how we understand
party finance reform more generally.
Keywords
British politics, new institutionalism, party funding, trade unions
Received: 27th October 2015; Revised version received: 1st March 2016; Accepted: 10th March 2016
Introduction
On the evening of 22 February 2012, there was a fracas in the Strangers’ Bar in the House
of Commons. Although the exact details are unclear, Labour Member of Parliament (MP)
for Falkirk, Eric Joyce – in an incident since referred to by Joyce as ‘the whacking’ – is
said to have been shouting ‘there are too many Tories in here’ before brawling with sev-
eral fellow MPs and their guests (Crampton, 2013). Joyce was suspended from the Labour
party, sat as an independent and vowed to stand down from Parliament in 2015, which set
in motion the selection process for a new Labour candidate for Falkirk. A controversy
surrounding this process led to a Labour party review which involved fundamental
considerations of the link between the Labour party and the trade unions. The brawl,
although seemingly insignificant, set in motion a chain of events, leading to a critical
Corresponding author:
Sam Power, Sussex Centre for the Study of Corruption, School of Law, Politics and Sociology, and Freeman
Centre, University of Sussex, Falmer, Brighton BN1 9QE, UK.
Email: s.d.power@sussex.ac.uk
Power
135
juncture in the evolution of the British party finance regime. The multiple potential out-
comes of said juncture will furthermore affect the academic understanding of party fund-
ing regime change in a wider sense.
This article will utilise elite interviews and extensive documentary analysis of news-
papers, broadcast media and parliamentary proceedings to unpack to what extent the
Collins Review, called in the aftermath of ‘the whacking’, can be understood as a critical
juncture in the evolution of the British party funding regime and what these events can
add to our understanding of how party funding regimes change. It will further analyse
how a historico-normative institutionalist understanding of these events can serve to
explain what the possible outcomes of these events will be.
The article will outline three institutional factors which have caused inertia in the party
funding reform process: the lack of public support for change (manifesting itself as stra-
tegic vote-seeking), timing (manifesting itself as strategic vote-seeking) and the inability
to navigate agreement on a trade union opt-in clause. The article will posit that the key
institutional lock has been picked. In this sense, the critical juncture is very much seen
within the understanding of Capoccia and Keleman (2007) as a moment in which both
structural influences on political action have been significantly relaxed – and, moreover,
multiple potential outcomes are possible. Furthermore, the continuance of the status quo
remains a possibility as ‘change is not a necessary element of a critical juncture’ (Capoccia
and Keleman, 2007: 348). Empirical studies of institutional development that employ
new institutional analysis are criticised for explaining the ‘divergence that occurs during
critical junctures as resulting from structural, antecedent conditions rather than from
actions that occur during the critical juncture itself’, by asserting that some actions are yet
to be taken (Capoccia and Keleman, 2007: 342). This article will better elucidate the dif-
ference between what can be understood as the path-dependent model that prior party
funding reforms have taken and why the current suggested reform represents a pivotal
moment in our understanding of it.
Analyses of party funding reform in the previous decades have been very much
informed by the new institutional turn in political science analysis. This article, therefore,
begins by outlining what we currently know about how and why parties adapt to new
ways of financing politics. It does so from the perspective of financial adaptation by par-
ties in lieu of more general new institutional theory, before examining the ripple effects
of ‘the whacking’.
Party funding regime change, what we know
Party funding regime change – or indeed proposed regime change – tends to manifest
itself in a move from private to public subsidisation and not vice versa (Ewing, 2007).1
Indeed, we can see this as a Europe-wide trend over the past 50 or so years from
Germany in 1959, to Latvia in 2010 (van Biezen and Kopecký, 2014). Many reasons
have been given for changes to party funding regimes, be it geographical proximity to
those countries enacting change – also known as Naßmacher’s (2001) diffusion thesis;
change manifesting itself as an explicit electoral strategy (Scarrow, 2004); party
organisational change (Weekers et al., 2009); and the appearance of political corrup-
tion (Koß, 2011: 4).
While the literature in the area of party funding regime change is not legion, there is a
continuing series of attempts to understand just how regime change works utilising new
institutional analysis. The birth of this analysis can be traced to Katz and Mair (1995)
136
Politics 37(2)
whose cartel party model – in particular the not unreasonable claim that there is an ever
closer symbiosis between parties and the state – is one that is intrinsically linked with
party funding regime change. It is a somewhat maligned yet academically resilient con-
cept which has informed much of the recent debate regarding party adaptation and change.
In response to a series of criticisms (e.g., Kitschelt, 2000; Koole, 1996; Scarrow, 2006),
Katz and Mair (2009) produced what they claim are restatements and clarifications
regarding the validity of the concept (see also Blyth and Katz, 2005; Katz, 2011).
Regardless of whether these more general critiques are valid, the cartel party thesis has
been criticised by party funding scholars as oversimplifying a complex process (Clift and
Fisher, 2005) and being empirically unsound (see, for example, Narud and Strøm, 2011).
More plausible rational choice explanations, such as ‘electoral economy’ (Scarrow,
2004), can be seen as confirming the fragility of the cartel party model, particularly in the
context of Great Britain. By outlining a rational response to a changing party environment
that might not always lead to an increase in state subventions, Scarrow describes a situa-
tion in which parties might actively campaign against the introduction of further state
subsidies. For example, such a position would be plausible if it would lead to an electoral
advantage over other parties, at the cost of further damage to party finances. So in the case
of Britain, Michael Koß (2011: 154) argues that parties can be understood as following an
electoral economy approach, valuing ‘their own electoral benefit above collective finan-
cial gains’. In this instance, we do not see what an original conception of the cartel party
model might understand as elite collusion around a static central funding regime, no
matter how beneficial it might be to leading party coffers. Here we see political parties,
wary of electoral damage, holding with a voluntarist status quo for fear of electoral
unpopularity.
Alternative institutionalist understandings of party funding regime change have been
forwarded, in part, due to the aforementioned theoretical and empirical failings of the
cartel party thesis. First, from a historical institutionalist perspective, it has been argued
that party funding regime change can be seen as a path-dependent response to increasing
financial difficulty (Pierre et al., 2000: 19). Moreover, in Great Britain, party funding
reform was largely stagnant from the introduction of the Corrupt and Legal Practices
(Prevention) Act 1883 (CLPPA) to the Political Parties, Elections and Referendums Act
2000 (PPERA). However, rather than introduce a meaningful level of state funding,
PPERA was a historical echo – on the national level – of the legislation introduced by the
CLPPA. Spending limits were adopted, in lieu of other (more popular on a European
level) means of potentially equalising electoral contests, such as state funding. In this
sense, ‘historical precedent’ can be seen as providing a path-dependent ‘constraint on
other possible policy options [increased state funding] on the basis that it had worked
relatively well at the local level’ (Fisher, 2011: 30).
Clift and Fisher (2004) argue...
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