Legislative Malapportionment and Economic and Political Outcomes: a Political Economy Assessment

Abstract: This paper studies the emergence and persistence of legislative malapportionment and analyzes its political and economic consequences using a political economy approach. Legislative malapportionment denotes a discrepancy between the share of legislative seats and the share of population held by electoral districts. We argue that legislative malapportionment enhances the elites’ de jure political influence by over-representing certain areas. This biased political representation survives in equilibrium as long as it helps democratic consolidation because pre- democracy elites manipulate democracy to preserve their power. At the same time, it reduces political competition and distorts public policies, hampering economic development. Empirical evidence from Latin America supports this theoretical framework. In a panel dataset for 11 Latin American countries for 1970-2000, we document that countries with higher lower-chamber malapportionment have lower GDP per capita. The same dataset also shows that higher malapportionment increases the probability of democratic consolidation. Finally, using within country data, we find that overrepresented electoral districts have a higher share of delegates from parties close to the pre-democracy ruling groups. Moreover, overrepresented states have stronger local elites, they have lower levels of political competition, and they also receive more transfers per capita from the central government.