This article investigates the political impact of the introduction of state subsidies to political parties. The arguments for and against subsidising political parries are outlined Different models of party subsidies, and their regulatory frameworks, are discussed. We find little evidence of a cross-national impact of the introduction of party subsidies. The subsidies cannot explain the decline in party membership. Nor is there evidence to suggest that the subsidies were introduced as a response to membership decline. There is no support for the allegation that party subsidies lead to the petrification of party systems. The subsidies have not meant that other income sources have lost their significance for political parties.