In order to encourage citizens to participate in politics, Japan adopted the ”Political Funds Control Act” in 1948 to regulate political finance. Due to prevailing pork-barrel politics, the ”Political Funds Control Act” has been modified several times. However, it still fails to ameliorate the situation of growing political funds. As a result, this study attempts to examine the interactive relationship between institutions and actors. And provide empirical evidence for the effect of institutional change on regulation of political finance using data from the political fund financial report. This study finds that the more restrictive regulation of political funds contributes to increase, rather than decrease, of political finance. Furthermore, the modification of the ”Political Funds Control Act” also changes the way that enterprises and organizations use for political donations.
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