Party Formation and Policy Outcomes under Different Electoral Systems

Abstract

I introduce a model of representative democracy that allows for strategic parties, strategic candidates, strategic voters, and multiple districts. If the distribution of policy preferences is sufficiently similar across districts and sufficiently close to uniform within districts, then the number of effective parties is larger under Proportional Representation than under Plurality Voting (extending the Duvergerian predictions), and both electoral systems determine the median voter’s preferred policy outcome. However, for more asymmetric distributions of preferences the Duvergerian predictions can be reversed ,a nd the policy outcome with Proportional Representation is always (weakly) more moderate than the one produced through Plurality Voting. Welfare analysis can be done, and the results do not depend on whether voters are sincere or strategic. Sincere voting induces more party formation, and strategic voting should be observed more often under Proportional Representation.