Abstract
The purpose of this paper is to study the relationship between proportional representation voting system and the size of government via its effects on political equilibrium. The multiparty spatial competition on tax-transfer policy and the post-electoral coalition formation are examined. The implemented policy does not necessarily reflect the median voter’s preference, ranging from laissez-faire to a redistributive economy according to income distribution. It can even reflect the preference of the lower income class in spite of equal income distribution, leading to the large-scale redistribution. Our results can explain the heterogeneous sizes of government observed among European proportional representation democracies.
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