Paper short abstract:

When political leaders adopt political party finance laws, this arguably means that they seek to regulate their own financial behavior. Given that in a context of weak institutions such laws need not necessarily matter, however, this paper investigates why and when leaders adopt (in)effective laws.

Paper long abstract:

This paper investigates how political leaders contribute to the quality of party democracy in Latin America through a focus on the political party finance reforms that occurred over the last two decades in Argentina, Colombia, and Costa Rica. The effectiveness of laws that regulate political party finance stands or falls with the willingness of political leaders to regulate their own financial behavior. It is therefore very likely that these reforms reflect tensions between strong elites and weak institutions. Secondly, political parties are one of the least appreciated institutions in the eyes of Latin American citizens. A focus on party law reform therefore allows insights into the effect that social demands for institutional change have on political leaders' willingness to regulate their own and their parties' financial management.

The paper shows that political leaders commonly adopt political finance laws to address challenges to their rule. Such a challenge may manifest itself in the form of popular demands for change, in which case political leaders use reforms as a formal means to address challenges to their legitimacy. When the challenge at hand consists of changes in intra- or inter-party competition, party law reform is instead applied as an instrumental tool to redress the political balance of power. Based on elite-interviews with politicians involved in these reform processes, this paper shows that laws that address a legitimacy crisis are less likely to be implemented in practice than the more instrumental type of laws that address changes in the political balance of power.