Most democracies (in one way or the other) provide cash grants (state aid) from taxpayers' money, the general revenue fund, for party activity.
Matching funds are granted to a political competitor who has proven to a government authority that he or she solicited small individual donations.
Because matching funds and tax credits depend on financial contributions by individual citizens such support is more compatible with a participatory concept of democracy than flat grants, which do not require specific efforts by the fundraising parties (or candidates).
[2] Since the 1970s, party subsidies have been introduced by Norway (1970), Canada and Italy (1974), Austria (1975), the U.S. (1976), Australia (1984), Denmark (1986), France (1988), Belgium (1989), Japan (1994), Ireland (1997), the Netherlands (1999), the U.K. (2000) and New Zealand (2010).
Nowadays it is also used in Greece, Portugal, Spain and other more recently established democracies in Europe and Latin America: India and Switzerland stand out as exceptions.