IDEAS home Printed from https://ideas.repec.org/p/wrk/warwec/1431.html
   My bibliography  Save this paper

Financing UK democracy : A stocktake of 20 years of political donations

Author

Listed:
  • Draca, Mirko

    (University of Warwick, Department of Economics & CAGE)

  • Green, Colin

    (Norwegian University of Science and Technology, Department of Economics & IZA)

  • Homroy, Swarnodeep

    (University of Groningen, Department of Economics, Econometrics and Finance)

Abstract

Political donations in the UK have been subject to comprehensive disclosure since 2001. We study the data produced as part of this disclosure policy to evaluate the role of private and public political finance over time. Total political donations have grown by 250% since 2001, reaching over £100 million in real terms for the first time in 2019. This increase has been driven by donations from private individuals, who now account for approximately 60% of donations in election years compared to 40-50% up to the late 2010s. Furthermore, ‘superdonors’ (those contributing more than £100,000) have been a prominent driver of the rise, increasing their own share from approximately 36% in 2017 to 46% in 2019. We also show that private donations to Labour fell sharply in the final stages of Jeremy Corbyn’s leadership. Overall, these trends have benefited the Conservative Party, leading to an historic resource gap between the two main parties emerging circa 2019. We calculate that the ‘resource gap’ between parties now stands at approximately £27 million compared to an historic average of £8-10 million (even when taking account of publicly-funded ‘Short’ money provided to the Opposition).

Suggested Citation

  • Draca, Mirko & Green, Colin & Homroy, Swarnodeep, 2022. "Financing UK democracy : A stocktake of 20 years of political donations," The Warwick Economics Research Paper Series (TWERPS) 1431, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1431
    as

    Download full text from publisher

    File URL: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2022/twerp_1431_-_draca.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Braggion, Fabio & Moore, Lyndon, 2013. "The Economic Benefits of Political Connections in Late Victorian Britain," The Journal of Economic History, Cambridge University Press, vol. 73(1), pages 142-176, March.
    2. Timothy Besley & Valentino Larcinese, 2011. "Working or shirking? Expenses and attendance in the UK Parliament," Public Choice, Springer, vol. 146(3), pages 291-317, March.
    3. Dawn Oliver, 1997. "Regulating the Conduct of Mps. the British Experience of Combating Corruption," Political Studies, Political Studies Association, vol. 45(3), pages 539-558, August.
    4. Acker, Daniella & Orujov, Ayan & Simpson, Helen, 2018. "Political donations and political risk in the UK: Evidence from a closely-fought election," Journal of Banking & Finance, Elsevier, vol. 92(C), pages 146-167.
    5. Colin P. Green & Swarnodeep Homroy, 2022. "Incorporated in Westminster: Channels and Returns to Political Connection in the United Kingdom," Economica, London School of Economics and Political Science, vol. 89(354), pages 377-408, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mirko Draca & Colin Green & Swarnodeep Homroy, 2023. "Financing UK democracy: a stocktake of 20 years of political donations disclosure," Fiscal Studies, John Wiley & Sons, vol. 44(4), pages 433-449, December.
    2. Geys, Benny & Mause, Karsten, 2011. "Moonlighting politicians: A survey and research agenda," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2011-101, WZB Berlin Social Science Center.
    3. Eric Hilt, 2014. "History of American Corporate Governance: Law, Institutions, and Politics," Annual Review of Financial Economics, Annual Reviews, vol. 6(1), pages 1-21, December.
    4. Bernecker, Andreas, 2014. "Do politicians shirk when reelection is certain? Evidence from the German parliament," European Journal of Political Economy, Elsevier, vol. 36(C), pages 55-70.
    5. Li, Lei & Luo, Changtuo, 2023. "Does administrative decentralization promote outward foreign direct investment and productivity? Evidence from China," Economic Modelling, Elsevier, vol. 124(C).
    6. van Hombeeck, Carlos Eduardo, 2020. "An exorbitant privilege in the first age of international financial integration?," Journal of International Money and Finance, Elsevier, vol. 101(C).
    7. Felix Arnold, 2013. "German MPs' Outside Jobs and Their Repercussions on Parliamentary Effort," Discussion Papers of DIW Berlin 1340, DIW Berlin, German Institute for Economic Research.
    8. Lei, Zhenhuan & Nugent, Jeffrey B., 2018. "Coordinating China's economic growth strategy via its government-controlled association for private firms," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1273-1293.
    9. Larcinese, Valentino & Sircar, Indraneel, 2017. "Crime and punishment the British way: Accountability channels following the MPs’ expenses scandal," European Journal of Political Economy, Elsevier, vol. 47(C), pages 75-99.
    10. Okazaki, Tetsuji & Sawada, Michiru, 2017. "Measuring the extent and implications of corporate political connections in prewar Japan," Explorations in Economic History, Elsevier, vol. 65(C), pages 17-35.
    11. Marco Frank & David Stadelmann, 2021. "Political competition and legislative shirking in roll-call votes: Evidence from Germany for 1953–2017," Public Choice, Springer, vol. 189(3), pages 555-575, December.
    12. James Foreman-Peck & Leslie Hannah, 2014. "Some consequences of the early twentieth-century British divorce of ownership from control," Business History, Taylor & Francis Journals, vol. 56(2), pages 335-335, March.
    13. Saibal Ghosh, 2018. "An index of legislators’ performance: evidence from Indian parliamentary data," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 20(1), pages 129-151, April.
    14. Grossman, Richard S. & Imai, Masami, 2016. "Taking the lord's name in vain: The impact of connected directors on 19th century British banks," Explorations in Economic History, Elsevier, vol. 59(C), pages 75-93.
    15. Burhop, Carsten & Chambers, David & Cheffins, Brian, 2014. "Regulating IPOs: Evidence from going public in London, 1900–1913," Explorations in Economic History, Elsevier, vol. 51(C), pages 60-76.
    16. Colin P. Green & Swarnodeep Homroy, 2022. "Incorporated in Westminster: Channels and Returns to Political Connection in the United Kingdom," Economica, London School of Economics and Political Science, vol. 89(354), pages 377-408, April.
    17. Braggion, Fabio & Dwarkasing, Narly & Moore, Lyndon, 2022. "Value creating mergers: British bank consolidation, 1885–1925," Explorations in Economic History, Elsevier, vol. 83(C).
    18. James Foreman-Peck & Leslie Hannah, 2012. "Some Consequences of the Early Twentieth Century Divorce of Ownership from Control," CIRJE F-Series CIRJE-F-864, CIRJE, Faculty of Economics, University of Tokyo.
    19. Fjesme, Sturla L. & Galpin, Neal E. & Moore, Lyndon, 2021. "Rejected stock exchange applicants," Journal of Financial Economics, Elsevier, vol. 139(2), pages 502-521.
    20. Portmann, Marco & Stadelmann, David & Eichenberger, Reiner, 2022. "Incentives dominate selection – Chamber-changing legislators are driven by electoral rules and voter preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 353-366.

    More about this item

    Keywords

    Political Connections ; Political Donations JEL Codes: D72;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wrk:warwec:1431. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Margaret Nash (email available below). General contact details of provider: https://edirc.repec.org/data/dewaruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.