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Electoral Systems, Voters’ Interests and Geographic Dispersion

Abstract

There is general agreement that democratic institutions shape politicians’ incentives to cater to certain constituencies, but which electoral system causes politicians to be most responsive to narrow interests is still debateable. Some argue that plurality electoral rules provide the greatest incentives for politicians to cater to the interests of a few; others say proportional systems prompt politicians to be relatively more prone to narrow interests. This study suggests that both positions can be correct under different conditions. Politicians competing in plurality systems privilege voters with a shared narrow interest when such voters are geographically concentrated, but when they are geographically diffuse, such voters have greater political influence in proportional electoral systems. Government spending on subsidies in fourteen developed countries provides empirical support for this argument.

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London School of Economics (email: s.rickard@lse.ac.uk). This article was conceived of while the author was a visitor at the Institute for International Integration Studies, Trinity College Dublin. She wishes to thank Philip Lane, Kevin O'Rourke and Ken Benoit for their hospitality, and is particularly grateful to Kevin O'Rourke for his invaluable suggestions and encouragement and to Marius Brülhart for generously sharing his data. An online appendix can be viewed at http://www.journals.cambridge.org/jps; and supplementary tables and replication data are available at http://personal.lse.ac.uk/RICKARD/research.html.

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20 Persson and Tabellini, The Economic Effects of Constitutions.

21 Stephanie J. Rickard, ‘A Non-Tariff Protectionist Bias in Majoritarian Politics: Government Subsidies and Electoral Institutions’, International Studies Quarterly, forthcoming.

22 Grossman and Helpman, ‘A Protectionist Bias in Majoritarian Politics’.

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31 Duchêne and Shepherd, ‘Sources of Industrial Policy’.

32 This may be particularly true in PR systems that require a party to achieve a minimum percentage of votes to receive any legislative seats. Typically, this threshold is between 2 and 5 per cent of the number of votes cast. Parties which do not reach that level of support gain no representation in parliament.

33 Carlsson Bo, ‘Industrial Subsidies in Sweden: Macro-Economic Effects and an International Comparison’, Journal of Industrial Economics, 32 (1983), 123

34 This type of spending, often referred to as ‘pork barrel’ spending, frequently reflects discretionary spending decisions. See Persson and Tabellini, The Economic Effects of Constitutions, p. 14.

35 Persson and Tabellini, The Economic Effects of Constitutions, p. 14.

36 Dale T. Mortensen and Christopher A. Pissarides, ‘Taxes, Subsidies and Equilibrium Labour Market Outcomes’ (CEPR Discussion Paper No. 2989, 2001).

37 Mortensen and Pissarides, ‘Taxes, Subsidies and Equilibrium Labour Market Outcomes’.

38 Frieden Jeffry A.Lake David A. and Schultz Kenneth A., World Politics: Interests, Interactions, Institutions (London: W. W. Norton & Co., 2010)

Beghin John C., Osta Barbara ElCherlow Jay R. and Mohanty Samarendu, ‘The Cost of the US Sugar Program Revisited’, Contemporary Economic Policy, 21 (2003), 106116

39 Beghin, El Osta, Cherlow and Mohanty, ‘The Cost of the US Sugar Program Revisited’.

40 These spending data come from the International Monetary Fund's Government Financial Statistics. These data include all fiscal outlays targeted to the manufacturing sector. For example, all subsidies, grants, and subsidized loans provided to the manufacturing sector to support manufacturing enterprises and/or development, expansion or improvement of manufacturing are included. Although conventional government accounts are generally not suitable for comparisons between countries and over time, because they reflect the organizational structures of governments, these data, uniquely compiled by the IMF, allow meaningful cross-national comparisons over time. For additional information, see International Monetary Fund, Government Finance Statistics Manual (Washington, D.C.: IMF, 2001).

41 Rogowski and Kayser, ‘Majoritarian Electoral Systems and Consumer Power’.

42 McGillivray, Privileging Industry.

43 Rodriguez Francisco and Rodrik Dani, ‘Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-national Evidence’, NBER Macroeconomics Annual, 15 (2000), 261325

44 Milesi-Ferreti, Rostagno and Perotti, ‘Electoral Systems and Public Spending’.

45 Persson Torsten and Tabellini Guido, ‘The Size and Scope of Government: Comparative Politics with Rational Politicians’, European Economic Review, 43 (1999), 699735

46 Robert Ford and Win Suyker, ‘Industrial Subsidies in the OECD Economies’, OECD Department of Economics and Statistics Working Papers, No. 74 (Paris: OECD Publications, 1990); OECD, Improving the Environment through Reducing Subsidies (Paris: OECD Publications, 1998).

47 International Monetary Fund, Government Finance Statistics (Washington, D.C.: IMF, 2001); Shenggen Fan and Neetha Rao, ‘Public Spending in Developing Countries’, EPTD Discussion Paper No. 99 (Washington, D.C.: International Food Policy Research Institute, 2003).

48 Blais André, ‘The Political Economy of Public Subsidies’, Comparative Political Studies, 19 (1986), 201217

Verdier Daniel, ‘The Politics of Public Aid to Private Industry’, Comparative Political Studies, 28 (1995), 342

Alt James E., Carlsen FredrikHeum Per and Johansen Kåre, ‘Asset Specificity and the Political Behavior of Firms: Lobbying for Subsidies in Norway’, International Organization, 53 (1999), 99116

Zahariadis Nikolaos, ‘Asset Specificity and State Subsidies in Industrialized Countries’, International Studies Quarterly, 45 (2001), 603616

Aydin Umut, ‘Promoting Industries in the Global Economy: Subsidies in OECD Countries, 1989 to 1995’, Journal of European Public Policy, 14 (2007), 115131

49 Brülhart Marius and Traeger Rolf, ‘An Account of Geographic Concentration Patterns in Europe’, Regional Science and Urban Economics, 35 (2005), 597624

50 Busch Marc L. and Reinhardt Eric, ‘Industrial Location and Protection: The Political and Economic Geography of U.S. Nontariff Barriers’, American Journal of Political Science, 43 (1999), 10281050

51 It is not, however, a measure of political concentration. At present, measures of political concentration are only possible in the data-rich United States.

52 Unfortunately, due to data limitations mapping the geographic dispersion of manufacturing employment into electoral districts is not possible for even the limited sample of countries under investigation here.

53 Bawn Kathleen and Rosenbluth Frances, ‘Short Versus Long Coalitions: Electoral Accountability and the Size of the Public Sector’, American Journal of Political Science, 50 (2006), 251265

Persson TorstenRolland Gerard and Tabellini Guido, ‘Electoral Rules and Government Spending in Parliamentary Democracies’, Quarterly Journal of Political Science, 2 (2007), 155188

54 The 14 sample countries are: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Netherlands, Norway, Spain, Sweden, Switzerland and the United Kingdom.

55 Beck Thorsten, Clarke George, Groff AlbertoKeefer Philip and Walsh Patrick, ‘New Tools in Comparative Political Economy: The Database of Political Institutions’, World Bank Economic Review, 15 (2001), 165176

56 Shugart Matthew and Wattenberg Martineds, Mixed-Member Electoral Systems: The Best of Both Worlds? (Oxford: Oxford University Press, 2001)

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57 Shugart and Wattenberg, ‘Mixed-Member Electoral Systems’.

58 Moser Robert G., ‘The Effects of Electoral Systems on Women's Representation in Post-communist States’, Electoral Studies, 20 (2001), 353369

Cox Karen and Schoppa Len, ‘Interaction Effects and Mixed Member Systems: Theory and Evidence from Germany, Japan and Italy’, Comparative Political Studies, 35 (2002), 10271053

Ferrara Frederico and Herron Erik, ‘Going it Alone? Strategic Entry Under Mixed Electoral Rules’, American Journal of Political Science, 49 (2005), 1631

59 This measure is calculated for each country-election-year. For non-election years, the least squares index from the most recent previous election is used. If two elections occur in the same year, the average of the least squares index (LSq) for that country-year is used.

60 These data are from Joel W. Johnson and Jessica S. Wallack, ‘Electoral Systems and the Personal Vote’, available at http://polisci2.ucsd.edu/jwjohnson/espv.htm (accessed 14 April 2011).

61 Johnson and Wallack, ‘Electoral Systems and the Personal Vote’.

62 Bawn and Rosenbluth, ‘Short Versus Long Coalitions’.

63 Stephanie J. Rickard, ‘Welfare versus Subsidies: Governmental Spending Decisions in an Era of Globalization’ (unpublished manuscript, London School of Economics and Political Science, 2011).

64 Ronald Rogowski, ‘Pork, Patronage, and Protection: How Geographic Concentration Affects Representation of Interests in Small-District Systems’ (UCLA, unpublished manuscript, 1997).

65 Blais André and Massicotte Louis, ‘Electoral Formulas: A Macroscopic Perspective’, European Journal of Political Research, 32 (1997), 107129

66 Dixit Avinash and Londregan John, ‘The Determinants of Success of Special Interests in Redistributive Politics’, Journal of Politics, 58 (1996), 11321155

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68 Persson and Tabellini, The Economics Effects of Constitutions.

69 Persson and Tabellini, The Economics Effects of Constitutions.

70 McGillivray, Privileging Industry.

71 Verdier, ‘The Politics of Public Aid to Private Industry’.

72 Iversen Torben and Soskice David, ‘Electoral Institutions and the Politics of Coalitions: Why Some Democracies Redistribute More than Others’, American Political Science Review, 100 (2006), 165181

73 Ronald Rogowski, Mark A. Kayser, and Daniel Kotin, ‘How Geographical Concentration Affects Industrial Influences: Evidence from US Data’ (unpublished manuscript, UCLA, 1999), 1–23, p. 7; McGillivray, Privileging Industry, pp. 15–16.

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75 Cox Gary W. and McCubbins Mathew D., ‘Electoral Politics as a Redistributive Game’, Journal of Politics, 48 (1986), 370389

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77 Brambor, Clark and Golder, ‘Understanding Interaction Models’, p. 76

78 Garrett Geoffrey, ‘Globalization and Government Spending Around the World’, Studies in Comparative International Development, 35 (2001), 329

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79 Rickard, ‘Welfare versus Subsidies’.

80 Dixit and Londregan, ‘The Determinants of Success of Special Interests in Redistributive Politics’; Lindbeck and Weibull, ‘Balanced Budget Redistribution and the Outcome of Political Competition’.

81 For example, excluding the United Kingdom from the sample does not change the key results. Similarly, the key results are robust to alternative model specifications including ordinary least squares (OLS) models with Driscoll–Kraay standard errors and the Newey and West estimator with lag length 1. These results are reported in an online appendix.

82 This holds for approximately 10 per cent of the sample.

83 Boix Carles, ‘Setting the Rules of the Game: The Choice of Electoral Systems in Advanced Democracies’, American Political Science Review, 93 (1999), 609624

84 Cusack Thomas R.Iversen Torben and Soskice David, ‘Economic Interests and the Origins of Electoral Systems’, American Political Science Review, 101 (2007), 373391

85 Persson and Tabellini, The Economic Effects of Constitutions; Evans, ‘A Protectionist Bias in Majoritarian Politics’.

86 Persson and Tabellini, The Economic Effects of Constitutions.

87 Persson and Tabellini, The Economic Effects of Constitutions, demonstrate that these periods best describe the pattern of electoral system adaptation.

88 If anything, correcting for potential endogeneity appears to reduce the standard errors on the estimated marginal effect of PR.

89 Wacziarg Romain and Wallack Jessica Seddon, ‘Trade Liberalization and Intersectoral Labor Movements’, Journal of International Economics, 64 (2004), 411439

90 However, Rickard finds evidence that labour mobility mediates the effect of electoral rules on governments’ willingness to provide narrow transfers in violation of GATT/WTO rules. As the costs of adjustment increase, the number of narrow transfers increases in both PR and majoritarian systems.

Rickard Stephanie J., ‘Strategic Targeting: The Effect of Institutions and Interests on Distributive Transfers’, Comparative Political Studies, 42 (2009), 670695

91 Bawn and Rosenbluth, ‘Short Versus Long Coalitions’.

92 Robert J. Franzese, ‘Effective Representation in Democratic Policymaking’ (unpublished manuscript, University of Michigan: 2008).

* London School of Economics (email: ). This article was conceived of while the author was a visitor at the Institute for International Integration Studies, Trinity College Dublin. She wishes to thank Philip Lane, Kevin O'Rourke and Ken Benoit for their hospitality, and is particularly grateful to Kevin O'Rourke for his invaluable suggestions and encouragement and to Marius Brülhart for generously sharing his data. An online appendix can be viewed at http://www.journals.cambridge.org/jps; and supplementary tables and replication data are available at http://personal.lse.ac.uk/RICKARD/research.html.

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