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Electoral Systems and Real Prices: Panel Evidence for the OECD Countries, 1970–2000

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  • CHANG, ERIC C. C.
  • KAYSER, MARK ANDREAS
  • ROGOWSKI, RONALD

Abstract

In a recent article, Rogowski and Kayser introduced a claim to the political economy literature that majoritarian electoral systems: (a) systematically privilege consumers relative to producers and, consequently, (b) reduce real prices. The authors, modifying an established model of regulation, showed that, within a competitive political system, politicians favour those who provide only votes (consumers) over those who provide both money and votes (producers). When producers provide only money, the intuition becomes apparent even without a model: politicians respond more to voters under (majoritarian) systems in which a small change in vote share can produce a large change in seat share. Cross-sectional evidence for the OECD (Organization for Economic Co-operation and Development) countries in 1990 was strongly supportive, suggesting that real prices were, all else equal, about 10 per cent lower in the averageOECDcountry with single-member district (SMD) electoral systems than in those that used some form of proportional representation (PR).As with all new empirical claims, healthy scepticism is warranted. Indeed, recent research in related areas has to be contrasted with – but it has not contradicted – these price results, associating proportional electoral arrangements with more positive social welfare outcomes including (a) less income inequality, (b) higher public spending, or, in combination with central banking institutions, (c) greater price stability. We acknowledge the possible incongruity of these results with those of Rogowski and Kayser; after all, verification of the price effects would suggest a more complicated relationship between electoral institutions and social welfare than is indicated in the extant literature.

Suggested Citation

  • Chang, Eric C. C. & Kayser, Mark Andreas & Rogowski, Ronald, 2008. "Electoral Systems and Real Prices: Panel Evidence for the OECD Countries, 1970–2000," British Journal of Political Science, Cambridge University Press, vol. 38(4), pages 739-751, October.
  • Handle: RePEc:cup:bjposi:v:38:y:2008:i:04:p:739-751_00
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    Cited by:

    1. Canes-Wrone, Brandice & Park, Jee-Kwang, 2010. "Electoral Business Cycles in OECD Countries," Papers 9-12-2010a, Princeton University, Research Program in Political Economy.
    2. Galasso, Vincenzo & Nunnari, Salvatore, 2019. "The Economic Effects of Electoral Rules: Evidence from Unemployment Benefits," Quarterly Journal of Political Science, now publishers, vol. 14(3), pages 259-291, July.
    3. Kagitani, Koichi & Harimaya, Kozo, 2019. "Electoral rules and free trade agreements as a campaign issue: The case of political disputes over the Trans-Pacific Partnership in Japan," Japan and the World Economy, Elsevier, vol. 49(C), pages 126-137.
    4. Garance Genicot & Laurent Bouton & Micael Castanheira, 2021. "Electoral Systems and Inequalities in Government Interventions [“Distributive Politics and Electoral Incentives: Evidence from Seven US State Legislatures.”]," Journal of the European Economic Association, European Economic Association, vol. 19(6), pages 3154-3206.
    5. Russo, Giuseppe & Salsano, Francesco, 2019. "Electoral systems and immigration," European Journal of Political Economy, Elsevier, vol. 60(C).
    6. Isa Camyar & Bahar Ulupinar, 2019. "Electoral systems and the economy: a firm-level analysis," Constitutional Political Economy, Springer, vol. 30(1), pages 1-30, March.
    7. Pinheiro, Flavio, 2014. "A Protectionist Bias in Proportional Politics: Assessing How Electoral Institutions Affect Tariff Levels," SocArXiv xp5zm, Center for Open Science.
    8. Koichi Kagitani & Kozo Harimaya, 2020. "Constituency systems, election proximity, special interests and a free trade agreement: the case of the Trans-Pacific Partnership in Japan," International Economics and Economic Policy, Springer, vol. 17(4), pages 897-922, October.
    9. Hatfield, John William & Hauk, William R., 2014. "Electoral regime and trade policy," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 518-534.
    10. Patrick Wagner & Michael Plouffe, 2019. "Electoral systems and trade-policy outcomes: the effects of personal-vote incentives on barriers to international trade," Public Choice, Springer, vol. 180(3), pages 333-352, September.
    11. Christopher Wratil, 2015. "Democratic Responsiveness in the European Union: the Case of the Council," LEQS – LSE 'Europe in Question' Discussion Paper Series 94, European Institute, LSE.
    12. Weinberg, Joe, 2018. "Where’s the Pork?: The Political Economy of the US Farm Bill," 2018 Annual Meeting, August 5-7, Washington, D.C. 273867, Agricultural and Applied Economics Association.
    13. Michaël Aklin & Eric Arias & Julia Gray, 2022. "Inflation concerns and mass preferences over exchange‐rate policy," Economics and Politics, Wiley Blackwell, vol. 34(1), pages 5-40, March.

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