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Electoral System and Public Spending

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  • 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 present a model emphasizing the distinction between purchases of goods and services, which are easier to target geographically, and transfers, which are easier to target across social groups. Voters have an incentive to elect representatives more prone to transfer spending in proportional systems. The model also predicts higher primary spending in proportional systems when the share of transfer spending is high. After defining rigorous measures of proportionality, we find considerable empirical support for our predictions.

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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; electoral system; electoral systems; voter; voting; government spending; fiscal outcomes; election; voters; electoral institutions; fiscal policy; constituency; elections; government expenditure; high spending; voting method; voting systems; fiscal performance; public spending; fiscal variables; political science; fiscal institutions; primary expenditure; fiscal system; government budget; government budget constraint; budget constraint; fiscal policy response; public expenditures; taxation; public finance; proportional representation; fiscal data; budget deficits; tax income; democratic tradition; fiscal instruments; fiscal consolidations; fragmented fiscal policy; public expenditure; election results;

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