Discussion Papers, Center for European Governance and Economic Development Research 177
In 2001, the state parliament of the German federal state of Hesse abolished a 5 percent legal electoral threshold for local elections. This reform had a stronger effect on municipalities with larger councils because implicit electoral thresholds decrease with council size. Exploiting discontinuities in a state law that exogenously maps population to council size, we implement a difference in discontinuity design to study the political consequences of abolishing an electoral threshold. The dataset covers all 426 Hessian municipalities over the period 1989-2011. Our results suggest that the seat and vote shares of small parties increased in municipalities that were affected more strongly by the abolishment. In addition, municipalit ies exposed to stronger treatments reduced their council size, presumably to limit political competition.