The Contribution of Party Regulation and Finance to Party System Stabilization: the Case of Estonia

Among the countries of Central and Eastern Europe, Estonia has developed one of the more activist systems of party regulation and finance, having successively adopted a series of legislative acts:

-          regulating political parties (1994),

-          instituting a system of generous state funding (1996),

-          banning electoral alliances (1998),

-          making party membership lists public information (2002)

-          prohibiting contributions from private businesses (2003)

-          creating an official oversight body to monitor party finances and campaign spending (2010)

All of these developments have led some to hypothesize about the effect of such measures on the consolidation of post-communist party systems. Indeed, by 2011 Estonia had an effective number of electoral parties of 4.8 and an effective number of parliamentary parties of just 3.8. This paper will examine these hypotheses and reflect on the degree to which such institutions influence the stabilization of party systems alongside competing hypotheses such as social cleavages or electoral rules. The paper will provide important background to one of the more successful cases of party system consolidation in the region.