Anti-Corruption Regulation of Political Finance and Conflict of Interest A Conceptual Framework and Analysis of its Development Inauguraldissertation zur Erlangung des Doktorgrades der Wirtschafts- und Sozialwissenschaftlichen Fakultät der Universität zu Köln 2020 vorgelegt von Valeria Andreevna Tonhäuser, M.A. aus Moskau, Russische Föderation Referent: Prof. Dr. André Kaiser Korreferent: Prof. Dr. Ingo Rohlfing Tag der Promotion: 1. September 2020 To Christian and Maxim v Contents List of Figures and Tables ........................................................................................................................ ix List of Abbreviations ................................................................................................................................. x Acknowledgements ................................................................................................................................. xi Introduction ............................................................................................................................................ xii The Need to Separate Political and Economic Power, and Important Definitions ............................ xii Research Questions ........................................................................................................................... xiii Emergence of Transparency Regulation of Political Finance and Conflict of Interest ...................... xiii The Argument ..................................................................................................................................... xv Transparency Regulation of Party Finance and Other Types of Regulation of Political Finance ...... xvi Reforms of Party Finance and COI Regulation: State of Research ................................................... xxv Concluding Remarks ......................................................................................................................... xxx A Brief Summary .............................................................................................................................. xxxi A Detailed Overview of the Main Contributions ............................................................................ xxxii A Publication Status of the Articles and an Overview of my Contributions to the Co-authored Works ............................................................................................................................................ xxxiv 1. Why Make Political Finance Transparent? Explaining the GRECO´s Success in Reforming National Political Finance Regulation ................................................................................................................... 1 1.1. Introduction .................................................................................................................................. 1 1.2. Policy Change on Foreign Advice: Why do Countries Care? ........................................................ 3 1.3. Variation in Compliance: Foreign Costs ....................................................................................... 7 1.4. Variation in Compliance: Domestic Costs .................................................................................... 9 1.5. Data and Operationalization ...................................................................................................... 12 1.6. Results ........................................................................................................................................ 17 1.7. Conclusion .................................................................................................................................. 21 1.8. Appendix ..................................................................................................................................... 24 1.8.1. Appendix A. General Information on GRECO ...................................................................... 24 1.8.2. Appendix B. Robustness Checks and Summary Statistics ................................................... 28 1.8.3. Appendix C. Testing Additional Specifications and Alternative Control Variables.............. 37 1.8.4. Appendix D. Predictive Margins and Real Observations for the 3rd GRECO Round ............ 41 1.8.5. Appendix E. Coding Details .................................................................................................. 42 2. Why Change Party Finance Transparency? Political Competition and Evidence from the 'Deviant' Case of Norway...................................................................................................................................... 45 2.1. Introduction. Importance of Studies on Party Finance Transparency Regulation ..................... 45 2.2. Theoretical Model and Hypotheses ........................................................................................... 47 vi 2.3. Methods: Rationales for a Case Study and Process-tracing ....................................................... 51 2.4. Selection of a Deviant Case ........................................................................................................ 51 2.5. Operationalization of Party Finance Regulation and its Reforms .............................................. 53 2.6. Data Sources ............................................................................................................................... 54 2.7. Distinguishing Features of Political Competition in Norway ...................................................... 54 2.8. Tracing the Reform Process in Norway ...................................................................................... 55 2.9. Discussion: Theoretical Implications from Party Finance Transparency Reforms ..................... 62 2.10. Conclusion ................................................................................................................................ 63 2.11. Appendix ................................................................................................................................... 65 2.11.1. Appendix A. The Ordinary Law-Making Procedure in Norway.......................................... 65 2.11.2. Appendix B. Details on Composition of Parliamentary Committees ................................ 66 2.11.3. Appendix C. Electoral Strength and Position of Political Parties During Reforms of Party Finance Transparency. ................................................................................................................... 67 2.11.4. Appendix D. GRECO Recommendations to Norway .......................................................... 68 2.11.5. Appendix E. State Dependency of Norwegian Parliamentary Parties in 2016 and 2017 .. 69 2.11.6. Appendix F. List of Primary Sources, Newspaper Articles and Interviewees used in the Process Tracing Analysis ................................................................................................................ 70 3. Parliamentary Ethics Regulation and Trust in European Democracies ......................................... 73 3.1. Importance of Parliamentary Ethics Regulation ........................................................................ 73 3.2. Conceptualizing Conflict of Interest Regulation ......................................................................... 75 3.3. Constructing Indices of COI Regulation ...................................................................................... 78 3.4. Three Elements of COI Regimes – Three Empirical Dimensions? .............................................. 79 3.5. Why to Distinguish Different Elements of COI Regimes? COI Regulation and Trust in National Parliaments – An Empirical Illustration ............................................................................................. 84 3.6. Data and Operationalization of Variables .................................................................................. 86 3.7. Model Choice and Empirical Findings ........................................................................................ 87 3.8. Conclusion and Avenues for Future Research ............................................................................ 89 3.9. Appendix ..................................................................................................................................... 92 3.9.1. Appendix A. Justification of the Data Source on COI Regulation and Details of the Coding Procedure ...................................................................................................................................... 92 3.9.2. Appendix B. The Distribution of the Rule Strictness Scores Across the Sample ................. 93 3.9.3. Appendix C. The Logic Underpinning the COI Strictness Index on the Example of the Regulation of Gifts ......................................................................................................................... 94 3.9.4. Appendix D. Rules Strictness Scores by Country ................................................................. 95 3.9.5. Appendix E. Strength of Enforcements Structures by Country ........................................... 95 3.9.6. Appendix F. COI Strictness Scores by Country .................................................................... 96 3.9.7. Appendix G. Additional Information on Construction of the COI Sanction Index ............... 97 vii 3.9.8. Appendix H. The Distribution of Trust in National Parliament Across European Democracies .................................................................................................................................