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
Date Written: June 18, 2009
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: Suggested Citation