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Electoral System and Public Spending

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Author Info

  • Roberto Perotti
  • Massimo V. Rostagno
  • Gian-Maria Milesi-Ferretti

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. © 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 01/22.

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Length: 44
Date of creation: 01 Jan 2001
Date of revision:
Handle: RePEc:imf:imfwpa:01/22

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Related research

Keywords: Government expenditures; Economic models;

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