The costs of running a political party and a campaign for a parliamentary seat appear increasingly prohibitive. Financial resources continue to play a significant role in shaping political advantage, creating participation barriers to entry and entrenching incumbency. While the individual cost of politics and anecdotal information on political parties’ operations are identified, the scale of expenditure, sources of funding, allocation of resources and governance of political finance remain largely unexplored.
This paper examines how political parties in Malaysia manage their financing, both in terms of revenue sources and expenditures, allocation of resources by parties and explores how these arrangements shape political competition and inclusivity. Drawing on an interview-based exploration of the costs of running a political party, the study found that:

• Political parties face substantial operating costs, especially for longstanding (or ‘established’) parties.
• Parties rely on diverse and often informal funding sources, including a large contribution from individual and corporate donations.
• Established political parties tend to operate with a centralised national funding structure that channels resources to states and branches. While new entrant parties depend on more localised fundraising, which dilutes central financial governing authority.
• Rising costs bestow increasingly significant advantages on incumbents and those who are financially backed. Incumbents have larger and more diverse funding sources, including greater leverage on state-linked resources.
• Parties increasingly reward people who possess or can secure financial resources, reducing candidate quality and creating a further participation barrier for underrepresented groups.

Read the report for insights into the costs of running political parties in Malaysia and multi-level reform recommendations to address current regulatory gaps.