How Do Electoral Systems Affect Fiscal Policy? Evidence from State and Local Governments, 1890 to 2005

52 Pages Posted: 3 Sep 2008 Last revised: 25 May 2017

See all articles by Patricia Funk

Patricia Funk

University of Lugano

Christina Gathmann

Alfred-Weber Institut; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: June 18, 2009

Abstract

Using a new data set from 1890 to 2000, we estimate how the adoption of proportional representation affects policies in Swiss cantons. We show that proportional systems shift spending toward broad goods (e.g. education and welfare bene…fits) but decrease spending on targetable goods (e.g. roads and agricultural subsidies). We …find little evidence that proportional representation increases the size of government. We also demonstrate that compositional changes of the legislature, i.e. party fragmentation and better representation of left-wing parties, are associated with more spending. The direct electoral incentives of proportional rule appear to reduce government spending.

Keywords: Electoral System, Proportional Rule, Fiscal Policy, Switzerland

JEL Classification: H11, H52, H53, N44

Suggested Citation

Funk, Patricia and Gathmann, Christina, How Do Electoral Systems Affect Fiscal Policy? Evidence from State and Local Governments, 1890 to 2005 (June 18, 2009). Available at SSRN: https://ssrn.com/abstract=1260446 or http://dx.doi.org/10.2139/ssrn.1260446

Patricia Funk

University of Lugano ( email )

Via Giuseppe Buffi 13
Lugano, Ticino 6900
Switzerland

Christina Gathmann (Contact Author)

Alfred-Weber Institut ( email )

Bergheimer Str. 20
Heidelberg, 69115
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/index_html?lang=en&mainframe=http%3A//www.iza.org/en/webcontent/personnel/photos%

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.stanford.edu/~cgathman

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