ABSTRACT
The chapter examines a research of the connection between political party funding and corruption, with particular focus on Serbia. It also defines political corruption as transaction between private and public sector actors through which collective goods are illegitimately converted into private-regarding payoffs. An adequate legislative framework for political party financing is necessary to restrain corruption and provides fair political competition. In addition, the 2011 Law prohibits the political party participation in for-profit, commercial activities, and certain prima facie suspicious donations, and also granted the Anti-Corruption Agency more powers, providing for its financial independence. Financial transparency plays a crucial role in the effective monitoring of political funding and it is the purpose of exercising financial control over political parties, donations and spending. The other noticeable forms of political corruption in party funding, like party taxation, misuse of public resources for private purposes. Critical voters are the final judges, given that political parties depend on their votes to win elections.
