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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
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    References listed on IDEAS

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    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

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