Marginal Benefits? Electoral Geography and Economic Outcomes

I exploit a large natural experiment in Australia that saw the House of Representatives expand from 125 districts to 148 districts. This required substantial changes to electoral boundaries, which, for the first time, were determined by a body that was not subject to ministerial discretion. As a result of these changes to electoral boundaries, many postal areas moved from being in relative safe districts to relatively marginal districts. I examine the effect of these exogenous changes to the marginality of postal areas on median and mean incomes in subsequent years. I find no consistent relationship between changes in marginality and incomes in subsequent years. As such, there is no evidence that politicians systematically allocate income-affecting discretionary resources to marginal districts to increase their representation in Parliament, or to safe districts to ‘reward the base’.