Electoral systems and the distortion of voters' preferences

In this paper I show that in a parliamentary democracy, contrary to common wisdom, under a proportional electoral rule governments do not necessarily represent voters' preferences better than under plurality rule. While voters affect the composition of Parliament, decisions are taken by a subset of Parliamentarians: a coalition of them decides directly and through the government. As a consequence, two distortions might occur: one at the electoral stage when Parliament is formed and the other at the coalition formation stage, when government is chosen. Through a model à la Rubinstein, I show that small parties' bargaining power increases when parties are patient; for sufficiently patient parties, the small (but pivotal) ones obtain a large bargaining power. The distortion introduced by plurality rule goes in the opposite direction; this can be beneficial (in term of voters' representativeness) as long as the impact of the two distortions is similar. I show that under non restrictive conditions, plurality rule can outperform the proportional rule in terms of representativeness of voters' preferences.