The Comparative Political Economy of Economic Geography
This paper examines how different electoral rules affect the location decisions of firms through the effect on regional policy. The equilibrium location of industry in the economically smaller (larger) region is higher under majoritarian (proportional) elections. The standard prediction in the economic geography literature, that the larger region becomes the core when trade barriers are reduced, no longer holds. The establishment of manufacturing production in the smaller region is increasing in the level of regional integration. As trade is in- creasingly liberalized, the economy features a reversed core-periphery equilibrium. This result holds under both electoral rules. However, firms locate to the smaller region at a relatively higher rate in the case of majoritarian voting, hence, the reversed equilibrium occurs for a relatively lower level of regional integration with majoritarian elections. Empirical evidence shows that the model is consistent with qualitative features of the data, and the results are robust to an instrumental variable strategy that accounts for the potential endogeneity of the electoral rule.
|Date of creation:||02 Sep 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +46 8 16 20 00
Fax: +46 8 16 14 25
Web page: http://www.ne.su.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gilles Duranton & Diego Puga, 2000.
"Diversity and Specialisation in Cities: Why, Where and When Does it Matter?,"
Urban Studies Journal Limited, vol. 37(3), pages 533-555, March.
- Gilles Duranton & Diego Puga, 1999. "Diversity and Specialisation in Cities: Why, Where and When does it Matter?," CEP Discussion Papers dp0433, Centre for Economic Performance, LSE.
- Gilles Duranton & Diego Puga, . "DIVERSITY AND SPECIALISATION IN CITIES. Why, where and when does it matter?," UFAE and IAE Working Papers 443.99, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Duranton, Gilles & Puga, Diego, 1999. "Diversity and Specialization in Cities: Why, Where and When Does It Matter?," CEPR Discussion Papers 2256, C.E.P.R. Discussion Papers.
- Gilles Duranton & Diego Puga, 1999. "Diversity and specialisation in cities: Why, where and when does it matter?," Working Papers dpuga-99-02, University of Toronto, Department of Economics.
- Gilles Duranton & Diego Puga, 1999. "Diversity and specialisation in cities: why, where and when does it matter?," LSE Research Online Documents on Economics 20212, London School of Economics and Political Science, LSE Library.
- Torsten Persson & Gerard Roland & Guido Tabellini, 2007.
"Electoral Rules and Government Spending in Parliamentary Democracies,"
Levine's Working Paper Archive
321307000000000880, David K. Levine.
- Persson, Torsten & Roland, Gerard & Tabellini, Guido, 2007. "Electoral Rules and Government Spending in Parliamentary Democracies," Quarterly Journal of Political Science, now publishers, vol. 2(2), pages 155-188, May.
- Torsten Persson & Gerard Roland & Guido Tabellini, 2006. "Electoral Rules and Government Spending in Parliamentary Democracies," Levine's Working Paper Archive 321307000000000706, David K. Levine.
- Torsten Persson & Gerard Roland & Guido Tabellini, 2005. "Electoral Rules and Government Spending in Parliamentary Democracies," Levine's Working Paper Archive 784828000000000024, David K. Levine.
- Torsten Persson & Gerard Roland & Guido Tabellini, 2006. "Electoral Rules and Government Spending in Parliamentary Democracies," Levine's Working Paper Archive 321307000000000249, David K. Levine.
- Flam, Harry & Helpman, Elhanan, 1987. "Industrial policy under monopolistic competition," Journal of International Economics, Elsevier, vol. 22(1-2), pages 79-102, February.
- Robert-Nicoud, Frederic & Sbergami, Federica, 2004. "Home-market vs. vote-market effect: Location equilibrium in a probabilistic voting model," European Economic Review, Elsevier, vol. 48(1), pages 155-179, February.
- Heiko Steffens, 2010. "OECD. (2009). Promoting Consumer Education—Trends, Policies and Good Practices. Paris: Organisation for Economic Co-operation and Development. ISBN 978-92-64-06008-1. 189 pp., 30.00 EUR," Journal of Consumer Policy, Springer, vol. 33(3), pages 291-292, September.
- Martin, Philippe & Rogers, Carol Ann, 1994.
"Industrial Location and Public Infrastructure,"
CEPR Discussion Papers
909, C.E.P.R. Discussion Papers.
- Per Pettersson-Lidbom, 2008. "Do Parties Matter for Economic Outcomes? A Regression-Discontinuity Approach," Journal of the European Economic Association, MIT Press, vol. 6(5), pages 1037-1056, 09.
- Julian Ramajo & Montserrat Ferre, 2010. "Purchasing power parity revisited: evidence from old and new tests for an organisation for economic co-operation and development panel," Applied Economics, Taylor & Francis Journals, vol. 42(17), pages 2243-2260.
- Dupont, Vincent & Martin, Philippe, 2003.
"Subsidies to Poor Regions and Inequalities: Some Unpleasant Arithmetic,"
CEPR Discussion Papers
4107, C.E.P.R. Discussion Papers.
- Vincent Dupont & Philippe Martin, 2006. "Subsidies to poor regions and inequalities: some unpleasant arithmetic," Journal of Economic Geography, Oxford University Press, vol. 6(2), pages 223-240, April.
- Homburg, Stefan, 1997. "Ursachen und Wirkungen eines zwischenstaatlichen Finanzausgleichs," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 61-95.
- Weingast, Barry R. & Wittman, Donald, 2008. "The Oxford Handbook of Political Economy," OUP Catalogue, Oxford University Press, number 9780199548477, March.
- Ticchi, Davide & Vindigni, Andrea, 2003.
726, Stockholm University, Institute for International Economic Studies.
When requesting a correction, please mention this item's handle: RePEc:hhs:sunrpe:2011_0021. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sten Nyberg)
If references are entirely missing, you can add them using this form.