ABSTRACT
Moldova's chapter examines the development and influence of the political financing regime (PFR) on party and party system development, with a focus on the country's peculiar trajectory among post-communist polities. Unlike other transition regimes, Moldova delayed the reform of the PFR for over 15 years due to a lack of consensus among political elites. Even following the enactment of stricter regulations on donations, transparency, oversight and enforcement in 2007 and subsequent amendments over the next decade, few substantive changes occurred. The persistence of various regulatory loopholes allowed political parties and vested interests to circumvent existing regulations by channelling illicit funds into party and campaign coffers and perpetuating a cycle of mutual quid-pro-quo exchanges. These practices increased over time due to party dependence on business interests.
The turning point occurred in 2019 with the emergence of new political entrants. This breakthrough ushered in a substantial recalibration of PFR, featuring a drastic reduction in donation caps that contributed effectively to eroding the financial advantage enjoyed by established parties and those aligned with business interests. However, the fragility of the control mechanism, evidenced by the prolonged opacity surrounding donor information, unaccounted campaign spending and fragmented oversight with limited powers and scarce resources, considerably undermined the robustness of the regulatory regime to regulate the inflows and outflows of political money.
Despite these drawbacks, the introduction of direct public funding (DPF) was a pivotal shift, providing inclusive support to small parties for electoral and routine expenses. While the systemic impact is hard to gauge, these reforms altered Moldova's political landscape by encouraging new parties to leverage PFR for strategic advantage. Public funding also increased their survival odds and competitiveness relative to established players. This highlights the instrumental role of party funding rules deployed by political parties to gain an advantage over political opponents and ultimately shape political competition.
