Events at CERGE-EI

Prof. Micael Castanheira

Université Libre de Bruxelles, Belgium

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Authors: Laurent Bouton, Micael Castanheira, and Garance Genicot

Abstract: This paper revisits the economic effects of constitutions. We propose a model of governmental resource allocation under political competition and contrast majoritarian and proportional representation systems.

We derive predictions regarding the relationship between local --sub-district-- level characteristics and inequality in government intervention. Looking at a local level and introducing heterogeneity allows us to uncover a novel sprinkling effect of electoral competition. This effect can incentivize politician to allocate resources more equally under multi-district majoritarian elections than under proportional representation.

We identify conditions under which this effect more-than-offsets the incentive to target swing districts identified in the literature. Finally, we explore implications for the size of government, the trade-off between targeted transfers and global public goods, and potential reforms of the US Electoral College.

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