IDEAS home Printed from https://ideas.repec.org/p/eei/rpaper/eeri_rp_2014_06.html

Electoral Systems and Economic Growth: What is the Importance of the Proportionality Degree?

Author

Listed:
  • M. Rosaria Alfano
  • A. Laura Baraldi

Abstract

Previous empirical studies analysing the effect of electoral systems on growth lack unanimous answers as they miss-specify mixed systems in the empirical setting, that is, they neglect to consider the proportionality degree of mixed electoral systems. This work supplies the missing answers by properly distinguishing the three types of electoral rules using a proportionality degree index, that is, the Gallagher index. We estimate a non-linear relationship between the Gallagher proportionality index and the per capita GDP growth using cross-country panel data. Our findings show that the proportionality degree is significant for growth; mixed systems (characterised by an intermediate level of proportionality), combining the different advantages of both proportional and plurality systems, solve the problem of the accountability-responsiveness and the political-government instability trade-offs. As a consequence, they reach relatively higher growth rates with respect to more “extreme” electoral rules.

Suggested Citation

  • M. Rosaria Alfano & A. Laura Baraldi, 2014. "Electoral Systems and Economic Growth: What is the Importance of the Proportionality Degree?," EERI Research Paper Series EERI RP 2014/06, Economics and Econometrics Research Institute (EERI), Brussels.
    • Handle: RePEc:eei:rpaper:eeri_rp_2014_06
    as

    Download full text from publisher

    File URL: http://www.eeri.eu/documents/wp/EERI_RP_2014_06.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    2. William H. Greene & Ana P. Martins, 2013. "Striking Features of the Labor Market: Empirical Evidence," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 25-53.
    3. Levine, Ross & Zervos, Sara, 1993. "Looking at the facts : what we know about policy and growth from cross-country analysis," Policy Research Working Paper Series 1115, The World Bank.
    4. Torsten Persson & Guido Tabellini, 2004. "Constitutions and Economic Policy," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 75-98, Winter.
    5. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    6. Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December.
    7. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    8. Rodrik, Dani, 1991. "Policy uncertainty and private investment in developing countries," Journal of Development Economics, Elsevier, vol. 36(2), pages 229-242, October.
    9. repec:dgr:rugsom:06c05 is not listed on IDEAS
    10. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    11. Torsten Persson & Guido Tabellini, 2006. "Democracy and Development: The Devil in the Details," American Economic Review, American Economic Association, vol. 96(2), pages 319-324, May.
    12. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc.
    13. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-389, September.
    14. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    15. Loosemore, John & Hanby, Victor J., 1971. "The Theoretical Limits of Maximum Distortion: Some Analytic Expressions for Electoral Systems," British Journal of Political Science, Cambridge University Press, vol. 1(4), pages 467-477, October.
    16. Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 9-41, March.
    17. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    18. Bingham Powell Jr, G. & Vanberg, Georg S., 2000. "Election Laws, Disproportionality and Median Correspondence: Implications for Two Visions of Democracy," British Journal of Political Science, Cambridge University Press, vol. 30(3), pages 383-411, July.
    19. Philippe Aghion, 2005. "Growth and Institutions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 3-18, March.
    20. William H. Greene & Ana P. Martins, 2013. "Striking Features of the Labor Market: Theory," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 1-24.
    21. Jong-A-Pin, Richard, 2009. "On the measurement of political instability and its impact on economic growth," European Journal of Political Economy, Elsevier, vol. 25(1), pages 15-29, March.
    22. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
    23. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    24. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    25. Gallup, John L. & Sachs, Jeffrey D. & Mellinger, Andrew, "undated". "Geography and Economic Development," Instructional Stata datasets for econometrics geodata, Boston College Department of Economics.
    26. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    27. Torsten Persson, 2005. "Forms of Democracy, Policy and Economic Development," NBER Working Papers 11171, National Bureau of Economic Research, Inc.
    28. Gallagher, Michael, 1992. "Comparing Proportional Representation Electoral Systems: Quotas, Thresholds, Paradoxes and Majorities," British Journal of Political Science, Cambridge University Press, vol. 22(4), pages 469-496, October.
    29. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
    30. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    31. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    32. Gian Maria Milesi-Ferretti & Roberto Perotti & Massimo Rostagno, 2002. "Electoral Systems and Public Spending," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(2), pages 609-657.
    33. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    34. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    35. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yuriy O. Gaivoronskiy, 2015. "The Influence of Political Competition on the Efficiency of the Regional Executives in Russia," HSE Working papers WP BRP 28/PS/2015, National Research University Higher School of Economics.
    2. repec:ehu:ikerla:19433 is not listed on IDEAS
    3. Timothy Yu-Cheong Yeung & Izaskun Zuazu, 2020. "The impact of electoral rules on manufacturing industries: evidence of disaggregated data of 61 industries of 55 countries," Constitutional Political Economy, Springer, vol. 31(4), pages 458-488, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fedderke, Johannes & Klitgaard, Robert, 2013. "How Much Do Rights Matter?," World Development, Elsevier, vol. 51(C), pages 187-206.
    2. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    3. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," MPRA Paper 115610, University Library of Munich, Germany.
    4. Ahmad, Mahyudin & Hall, Stephen G., 2012. "Do institutions matter for growth? Evidence from East Asian countries," MPRA Paper 42158, University Library of Munich, Germany.
    5. Laura Recuero Virto & Denis Couvet & Frédéric Ducarme, 2018. "The determinants of economic growth in countries with high marine biodiversity," Working Papers 2018.03, FAERE - French Association of Environmental and Resource Economists.
    6. Slesman, Ly & Baharumshah, Ahmad Zubaidi & Ra'ees, Wahabuddin, 2015. "Institutional infrastructure and economic growth in member countries of the Organization of Islamic Cooperation (OIC)," Economic Modelling, Elsevier, vol. 51(C), pages 214-226.
    7. Daniel Oto Peralías & Daniel Oto-Peralías & Diego Romero-Ávila, 2012. "Tracing the Link between Government Size and Growth: The Role of Public Sector Quality," EcoMod2012 4015, EcoMod.
    8. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," EconStor Preprints 269878, ZBW - Leibniz Information Centre for Economics.
    9. Ahmad, Mahyudin & Marwan, Nur Fakhzan, 2012. "Economic growth and institutions in developing countries: Panel evidence," MPRA Paper 42293, University Library of Munich, Germany.
    10. Vieira, Flávio & MacDonald, Ronald & Damasceno, Aderbal, 2012. "The role of institutions in cross-section income and panel data growth models: A deeper investigation on the weakness and proliferation of instruments," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 127-140.
    11. Jeffry A. Jacob & Thomas Osang, 2018. "Democracy And Growth: A Dynamic Panel Data Study," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(01), pages 41-80, August.
    12. Farid Gasmi & Laura Recuero Virto & Denis Couvet, 2020. "The Impact of Renewable Versus Non-renewable Natural Capital on Economic Growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(2), pages 271-333, October.
    13. Saima Nawaz & M. Idrees Khawaja, 2016. "Fiscal Policy, Institutions And Growth: New Insights," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(05), pages 1251-1278, December.
    14. Aisen, Ari & Veiga, Francisco José, 2013. "How does political instability affect economic growth?," European Journal of Political Economy, Elsevier, vol. 29(C), pages 151-167.
    15. Bloom, David E. & Canning, David & Kotschy, Rainer & Prettner, Klaus & Schünemann, Johannes, 2024. "Health and economic growth: Reconciling the micro and macro evidence," World Development, Elsevier, vol. 178(C).
    16. M.Rosaria Alfano & A. Laura Baraldi, 2008. "The design of electoral rules and their impact on economic growth: the Italian case," Working Papers 3_2008, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    17. Li, Hongbin & Yang, Zheyu & Yao, Xianguo & Zhang, Haifeng & Zhang, Junsen, 2012. "Entrepreneurship, private economy and growth: Evidence from China," China Economic Review, Elsevier, vol. 23(4), pages 948-961.
    18. Lehmann, Hartmut & Silvagni, Maria Giulia, 2013. "Is There Convergence of Russia's Regions? Exploring the Empirical Evidence: 1995–2010," IZA Discussion Papers 7603, Institute of Labor Economics (IZA).
    19. E. Tsanana & X. Chapsa & C. Katrakilidis, 2016. "Is growth corrupted or bureaucratic? Panel evidence from the enlarged EU," Applied Economics, Taylor & Francis Journals, vol. 48(33), pages 3131-3147, July.
    20. Lee, Angela Y. & Aaker, Jennifer L., 2006. "A Monte Carlo Study of Growth Regressions," Research Papers 1836r1, Stanford University, Graduate School of Business.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H1 - Public Economics - - Structure and Scope of Government

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eei:rpaper:eeri_rp_2014_06. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Julia van Hove (email available below). General contact details of provider: https://edirc.repec.org/data/eeriibe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.