Abstract: Using a new data set from 1890 to today, we estimate how the adoption of proportional representation affects policies in Swiss cantons. We show that proportional systems tilt spending toward public goods like education and welfare benefits but decrease spending for targeted transfers like roads and agricultural subsidies. However, 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, while the direct electoral incentives of proportional rule appear to reduce government spending.

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