Abstract:

The emerging field of constitutional political economy has paid increasing attention to the effects different constitutional features of a polity have on its public finances. Among the constitutional features that have been examined, electoral rules have been of particular interest in many studies. This chapter takes stock of the existing studies about the effects of electoral rules on public finances, outlines the main shortcomings of the literature and offers directions for further research. In order to provide a systematic overview of the existing literature, the chapter first puts forth an analytical framework elaborating on accountability and coordination mechanisms through which different electoral systems can influence public finances. The effects of these mechanisms are scrutinized with the help of principal-agent, veto players, and common-pool models in order to make theoretical predictions about how different electoral systems influence the levels of expenditure, revenue, debt and deficit and also spending mix and tax mix. This analytical framework is subsequently used for summarizing, synthesizing and criticizing the existing studies and for identifying gaps in this particular field of research.