Electoral Thresholds and Political Outcomes: Quasi-Experimental Evidence from a Reform in Germany

Abstract

We exploit a natural experiment to study the political consequences of explicit electoral thresholds. The natural experiment in question is an electoral reform in the German federal state of Hesse. In 2001, the state parliament abolished the five percent electoral threshold for local elections. The abolishment of the threshold had, on average, a stronger effect on municipalities with larger councils since implicit electoral thresholds are inversely correlated with council size. Using a dataset that includes all 426 Hessian municipalities over the period 1989 to 2011 and exploiting discontinuities in a state law that exogenously maps population to council size, we implement a difference-in-discontinuity design for identification. Our results show that the seat and vote shares of small parties increased in municipalities affected more strongly by the reform. These political effects are primarily due to the reform’s psychological rather than the mechanical consequences. We also find that the reform had no effect on voter turnout. These findings suggest that abolishing an existing threshold improves the electoral prospects of smaller parties. It does, however, not increase voter participation.