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Electoral Rules and Public Spending

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  • Milesi-Ferretti, Gian Maria
  • Perotti, Roberto
  • Rostagno, Massimo

Abstract

We study the effects of electoral institutions on the size and composition of public expenditure in OECD and Latin American countries. We emphasize the distinction between purchases of goods and services, which are easier to target geographically, and transfers, which are easier to target across social groups. We present a theoretical model in which voters anticipating government policymaking under different electoral systems have an incentive to elect representatives more prone to transfer (public good) spending in proportional (majoritarian) systems. The model also predicts higher total primary spending in proportional (majoritarian) systems when the share of transfer spending is high (low). After defining rigorous measures of proportionality to be used in the empirical investigation, we find considerable support for our predictions.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2742.

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Date of creation: Mar 2001
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Handle: RePEc:cpr:ceprdp:2742

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Related research

Keywords: Electoral Rules; Proportionality; Public Spending; Transfers;

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Cited by:
  1. Edward L. Glaeser, 2005. "Inequality," NBER Working Papers 11511, National Bureau of Economic Research, Inc.
  2. Tomaso Duso, 2002. "On the Politics of the Regulatory Reform: Econometric Evidence from the OECD Countries," CIG Working Papers FS IV 02-07, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  3. Bernardo Bortolotti & Paolo Pinotti, 2003. "The Political Economy of Privatization," Working Papers 2003.45, Fondazione Eni Enrico Mattei.
  4. Glaeser, Edward L., 2005. "Inequality," Working Paper Series rwp05-056, Harvard University, John F. Kennedy School of Government.

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