Electoral Systems and Inequalities in Government Interventions
This paper studies the political determinants of inequality in government interventions under the majoritarian and proportional representation systems. Using a model of electoral competition with targetable government intervention and heterogeneous localities, we uncover a novel relative electoral sensitivity effect in majoritarian systems. This effect, which depends on the geographic distribution of voters, can incentivize parties to allocate resources more equally under majoritarian systems than proportional representation systems. This contrasts with the conventional wisdom that government interventions are more unequal in majoritarian systems.
We benefited from comments by Patrick Francois, Leyla Karakas, Alessandro Lizzeri, Dilip Mookherjee, Massimo Morelli, Nicola Persico, and Debraj Ray, as well as seminar and conference participants at Princeton, Georgetown, MSU, Texas A&M, UBC, Bocconi, Collegio Carlo Alberto, EUI, TSE, ETH Zurich, Copenhagen, CERGE-EI, Cornell PE Conference 2018, ThReD Conference 2018, Quebec PE Conference 2018, POLECON UK 2nd Annual Workshop, CORE Belgian-Japanese Public Finance Workshop, and the 13th Conference on Economic Growth and Development. We are grateful to Dario Sansone for excellent research assistance. Names are in random order following Ray ⓡ Robson 2018 The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Micael Castanheira ⓡ
Micael Castanheira is Director for Research at the Belgian National Science Foundation (FNRS-FRS) and gratefully acknowledges their financial support.