Working Paper: CEPR ID: DP2051
Authors: Torsten Persson; Guido Tabellini
Abstract: We try to demonstrate how economists may engage in research on comparative politics, relating the size and composition of government spending to the political system. A Downsian model of electoral competition and forward-looking voting indicates that majoritarian---as opposed to proportional---elections increase competition between parties by focusing it into some key marginal districts. This leads to less public goods, less rents for politicians, more redistribution and larger government. A model of legislative bargaining and backward-looking voting indicates that presidential---as opposed to parliamentary---regimes increase competition between both politicians and voters. This leads to less public goods, less rents for politicians, less redistribution, and smaller government. We confront these predictions with cross-country data from around 1990, controlling for economic and social determinants of government spending. We find strong and robust support for the prediction that the size of government is smaller under presidential regimes, and weaker support for the prediction that majoritarian elections are associated with less public goods.
Keywords: corruption; presidential system; electoral rules
JEL Codes: H1; H4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Majoritarian elections (D79) | less public goods provision (H42) |
| Majoritarian elections (D79) | smaller government size (H11) |
| Presidential regimes (P16) | smaller government size (H11) |
| Parliamentary regimes (D72) | larger government size (H11) |
| Presidential regimes (P16) | less public goods provision (H42) |
| Parliamentary regimes (D72) | more public goods provision (H49) |