Political Finance Regulation and Democratic Quality: A Cross-National Analysis of 160 Countries

Authors

• Lia ANTON — 1 Doctoral School

Abstract

Despite sustained policy debate about money in politics, systematic cross-national evidence on whether political finance regulation actually relates to democratic quality remains limited. This study asks whether regulatory comprehensiveness is associated with liberal democracy, which regulatory dimensions matter most, and whether the rule of law moderates these relationships. Drawing on three datasets, the International IDEA Political Finance Database, the Varieties of Democracy project (V-Dem v16), and the Worldwide Governance Indicators, the study constructs a composite Political Finance Regulation Index from five sub-dimensions covering 45 binary items across 160 countries. OLS regression with HC3 robust standard errors is used to test three hypotheses derived from democratic theory, institutional economics, and public choice theory. Results show a significant positive association between regulatory comprehensiveness and democratic quality that persists after controlling for rule of law and political stability (β = 0.147, p < 0.01, R² = 0.774). Sub-index decomposition reveals that transparency provisions carry the strongest individual association with democratic quality, while donation bans and public funding show no independent effect. Split-sample analysis suggests that regulation matters somewhat more in countries with weaker institutional frameworks. The null finding on corruption indicates that regulation operates through democratic mechanisms rather than as a direct anti-corruption tool. These results imply that policymakers should prioritise transparency infrastructure, mandatory disclosure, public reporting, and donor identification, over expanding bans or spending limits, and that such investments are most consequential in transitional democracies where institutional quality is still developing.

Keywords: political finance regulation; democratic quality; transparency; cross-national analysis; liberal democracy measurement; rule of law

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APA: Lia ANTON (2026). Political Finance Regulation and Democratic Quality: A Cross-National Analysis of 160 Countries. Internal Auditing & Risk Management, Vol. 21, pp. 77-93. https://doi.org/10.5281/zenodo.19352843

BibTeX:

@article{liaanton2026540,
  title = {Political Finance Regulation and Democratic Quality: A Cross-National Analysis of 160 Countries},
  author = {Lia ANTON},
  journal = {Internal Auditing & Risk Management},
  year = {2026},
  volume = {21},
  pages = {77--93},
  doi = {10.5281/zenodo.19352843}
}

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