The negative effect of state funding on electoral support of new parties in post-communist countries

Does state funding of parties lead to petrification of the party systems with very few new parties, or to competition that is more open where new parties proliferate? According to the cartel party thesis, the provision of state funding leads to the establishment of barriers to the entry of new parties. In contrast, strategic entry theory posits that state funding represents an electoral benefit and thus reduces the costs of entry; as a result, the electoral success of new parties should increase. This study covers 11 post-communist countries that joined the EU and analyses the relationships between state funding and new party support in 84 elections. Using various measures of state funding of parties (eligibility threshold, timing of financing, and amount of subsidies), this article shows a negative relationship between state funding of parties and electoral support of new parties.