Electoral Systems and Public Spending

45 Pages Posted: 30 Jan 2006

See all articles by Gian Maria Milesi-Ferretti

Gian Maria Milesi-Ferretti

National Bureau of Economic Research (NBER); Senior Fellow; Centre for Economic Policy Research (CEPR)

Roberto Perotti

Bocconi University - Department of Economics; European University Institute - Economics Department (ECO); Centre for Economic Policy Research (CEPR)

Massimo Rostagno

European Central Bank (ECB)

Date Written: February 2001

Abstract

We study the effects of electoral institutions on the size and composition of public expenditure in OECD and Latin American countries. We present a model emphasizing the distinction between purchases of goods and services, which are easier to target geographically, and transfers, which are easier to target across social groups. Voters have an incentive to elect representatives more prone to transfer spending in proportional systems. The model also predicts higher primary spending in proportional systems when the share of transfer spending is high. After defining rigorous measures of proportionality, we find considerable empirical support for our predictions.

Keywords: electoral rules, proportionality, public spending, transfers

JEL Classification: H11, H55

Suggested Citation

Milesi-Ferretti, Gian Maria and Milesi-Ferretti, Gian Maria and Perotti, Roberto and Rostagno, Massimo, Electoral Systems and Public Spending (February 2001). IMF Working Paper No. 01/22, Available at SSRN: https://ssrn.com/abstract=879365

Gian Maria Milesi-Ferretti (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Senior Fellow ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Roberto Perotti

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

European University Institute - Economics Department (ECO) ( email )

Villa San Paolo
Via della Piazzuola 43
50133 Florence
Italy

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Massimo Rostagno

European Central Bank (ECB) ( email )

Kaiserstrasse 29
Postfach 16 03 19
D-60311 Frankfurt am Main
Germany
+49 69 1344 7663 (Phone)
+49 69 1344 7604 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
271
Abstract Views
8,103
Rank
220,541
PlumX Metrics