Electoral Systems, Political Fragmentation and Government Spending

Abstract: Political economy models suggest that proportional representation affects politicians’ incentives and public spending decisions. These have important implications for policy recommendations and electoral reform. However, little is known which differences between proportional and majoritarian systems actually matter empirically. This paper compares the role of district size in proportional and majoritarian systems for the provision of public goods and the total size of government. We find that district size has sizeable effects on education and welfare spending, and the magnitude of the effect is much larger than for the electoral rule. We also show that there are important differences between proportional and majoritarian systems: while larger voting districts increase spending in majoritarian systems, they lower spending in proportional systems.