Electoral Rules, Social Structure, and Public Goods Provision: Outcomes, Spending, and Policies

Does proportional representation (PR) lead to broader public goods spending? Past literature has overwhelming shown that it does, but the empirics underlying these findings have mostly relied on ethnically homogenous Western countries. Categorizing countries along three dimensions of ethnic structure—ethnic fractionalization, ethno-income crosscuttingness and ethno-geographic dispersion—I argue that in some types of societies, PR has the positive effect on fiscal spending type predicted by past models, but not in others. Specifically, in countries with high ethnic salience (ethnically heterogeneous, low crosscutting) where ethnic groups are geographically intermixed, PR leads to narrower fiscal spending; in high ethnic salience societies where ethnic groups are geographically isolated, neither PR nor majoritarian electoral rules lead to broader fiscal spending. I test this socio-institutional theory in a sample of 70 developing democracies using life expectancy and illiteracy as proxies for public goods provision.