Centre for applied economics Opletalova 26, Praha 1, 110 00, FSV UK email:
[email protected] , web: cae.zindex.cz, twitter: cae_research ANALYSIS OF CZECH POLITICAL PARTY DONATIONS 12.1.2015 Jiří Skuhrovec, Vítězslav Titl, Miroslav Palanský 1 Centre for applied economics Opletalova 26, Praha 1, 110 00, FSV UK email:
[email protected] , web: cae.zindex.cz, twitter: cae_research Summary This study analyzes the financing of selected political parties in the Czech Republic since 2006. It makes extensive use of available data sources and reaches results unique not only in the Czech Republic, but also internationally. We find that 29.6% of all Czech procurement winners directly donate money to political parties. Other 20% of corporate party donors receive European donations, and few are even owned by the state. These situations pose a high risk of conflict of interests, as party members often directly decide about the outcomes of these transactions. The problem also manifests in real procurement results - our results suggest that a donation to a political party significantly increases the expected value of received public procurement contracts of the donor. At the same time the competition in its tenders is significantly lower. The results are robust despite the considerable errors in the available data we identified, when many donors among both physical and legal persons apparently do not exist (donors born after the donation, companies with a non-existing identification number). This is further complemented by significant accumulation of donations just under 50 000 CZK for which the proper identification of the donor is not required. The study also points out significant shares of offshore donors and donating shell corporations with no economic activity, possibly concealing true donor.