This paper investigates how the interplay of parties' preferences, political institutions and electoral competition affects the liberalisation of immigration policies. It joins a growing body of research that focuses on the role of domestic factors in shaping immigration policies. While several studies point to the important role of partisanship and the activation of public opinion, they fail to provide a clear mechanism that takes into account differences in parties' preferences as well as the institutional context they act in. By adding two crucial factors to the analysis, this paper presents a new framework for liberal change in the field of immigration politics. First, institutional veto points determine if left-of-centre parties can reform policies according to their preferences. Second, the degree of electoral competition and the politicisation of immigration issues affect how susceptible political parties are to the anti-immigrant sentiment in the population. A time-series cross-section analysis of 11 countries from 1980 to 2006 shows that left-of-centre governments are more likely to pass liberal reforms, but only if they are not facing an open veto point. Moreover, increased levels of electoral competition coupled with a politicisation of the immigration issue reduces the likelihood of liberal reforms.