Freiburger Diskussionspapiere zur Ordnungsökonomik 16/06
This paper investigates the effects of electoral system changes in Japan, New Zealand and Italy on the overall level of spending as well as on social spending. In 1996 both Japan and New Zealand switched from a majoritarian rule to a mixed-member electoral system. Italy switched from a proportional rule to a mixed-member electoral system in 1994 and turned back to a proportional rule in 2006. By applying the Synthetic Control Method I find an effect on the overall level of spending in the range between 2.13 and 3.36 percentage points. However, the treatment effect is either poorly statistically significant or insignificant. I can find a clear significant effect on social spending in New Zealand (2.08 percentage points) but not in Japan (0.45 percentage points) and Italy (0.42 percentage points and 1.53 percentage points). This might be due to the fact that New Zealand switched from a pure majoritarian rule to an almost pure proportional rule.
electoral system change government spending synthetic control method mixed-member electoral systems