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Persson, Torsten
Roland, Gerard
Tabellini, Guido
Year of Publication: 
Series/Report no.: 
CESifo Working Paper 1115
We present a theoretical model of a parliamentary democracy, where party structures, government coalitions and fiscal policies are endogenously determined. The model predicts that, relative to proportional elections, majoritarian elections reduce government spending because they reduce party fragmentation and, therefore, the incidence of coalition governments. Party fragmentation can persist under majoritarian rule if party supporters are unevenly distributed across electoral districts. Economic and political data, from up to 50 post-war parliamentary democracies, strongly support our joint predictions from the electoral rule, to the party system, to the type of government, and to government spending.
electoral rules
party systems
coalition governments
fiscal policy
electoral accountability
Document Type: 
Working Paper

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