A system of financial deposits is intended to ensure that all candidates who put themselves forward as candidates for public office will do so in a serious spirit. Anyone who wishes to be included on the ballot must, under the deposit system, lodge a certain sum of money with the electoral authorities. This deposit is, under the most common rules, returned if the candidate succeeds in obtaining a vote above a certain threshold. The practical effects of this will depend both on the amount of the deposit, and on the threshold a candidate must overcome in order to obtain the return of the deposit.

In Britain, both the level of the deposit, and the threshold of the vote required to avoid its forfeit, were traditionally set at sufficiently high levels to prune the number of would-be candidates. The deposit was a bulwark of the two-party system. Over several decades, inflation eroded the value of the deposit, which remained at £150. In 1985, the level of the deposit was finally raised, but to an extent that failed to restore its value to its pre-World War II level. Moreover, the new level of deposit - set in 1985 at £500 (US $ 800) - failed for two further reasons to create a real barrier against candidature. First, the level of deposit was not inflation linked; it was therefore due (in the absence of further legislation) to decline once again in real terms. Second, the threshold required to ensure the return of the deposit was greatly lowered, from 12.5 percent to 5 percent of the votes cast in the relevant constituency.

Richard Katz has recently published a study of the effect of the 1985 change in the law in Britain. The results of the change were as follows: under the new system, the main parties in Britain (Conservative, Labour, Liberal Democrat/Social Democrat Alliance and Scottish Nationalists) lost virtually no deposits. Some of the other small parties (such as the Welsh Nationalists and the Greens) lost many deposits but were not deterred from presenting candidates. The rise in the deposit from £150 to £500 was merely regarded by these parties as an additional campaign expenditure. The only effect of the higher deposit was to limit the number of independent candidates and those representing fringe or joke parties¹⁵. Since the deposit is intimately connected with the 'Westminster model' it is not surprising that the decline in its importance in Britain appears to be a part of a wider trend.

The table below shows deposit levels in a number of countries. The statistics suggest that it is only in a few countries that the level of deposit is high enough to have a significant effect. As shown by the following list, the deposit is a device found especially in countries influenced by the British model of electoral administration.

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