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Electoral competition and endogenous political institutions: quasi-experimental evidence from Germany

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  • Baskaran, Thushyanthan
  • Lopes da Fonseca, Mariana
Abstract
Do established parties change political institutions to disadvantage smaller, non-mainstream parties if the latters' electoral prospects improve? We study this question with a natural experiment from the German federal State of Hesse. The experiment is the abolishment of an explicit electoral threshold (the so called "five percent hurdle") for local elections in 2001 by the Hessian state parliament. The abolishment improved the electoral prospects of smaller parties at local elections, but local politicians from mainstream parties had the ability to adjust municipal political institutions in such as way as to counteract the increased competitiveness of smaller parties. One such institutional adjustment is to reduce the size of the local council and thereby raise implicit electoral thresholds. Using a dataset that covers all 426 Hessian municipalities over the period 1989-2011, we document with a difference-in-discontinuity design that municipalities where the electoral competitiveness of smaller parties improved more because of the abolishment of the explicit threshold, reduced their council size more. Hence, established parties appear to erect barriers to entry by adjusting political institutions once new political formations become viable electoral alternatives.

Suggested Citation

  • Baskaran, Thushyanthan & Lopes da Fonseca, Mariana, 2014. "Electoral competition and endogenous political institutions: quasi-experimental evidence from Germany," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100409, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc14:100409
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    Cited by:

    1. Thushyanthan Baskaran & Zohal Hessami, 2017. "Political alignment and intergovernmental transfers in parliamentary systems: evidence from Germany," Public Choice, Springer, vol. 171(1), pages 75-98, April.
    2. Christian Bergholz & Ivo Bischoff, 2018. "Local council members’ view on intermunicipal cooperation: does office-related self-interest matter?," Regional Studies, Taylor & Francis Journals, vol. 52(12), pages 1624-1635, December.
    3. Ivo Bischoff & Eva Wolfschütz, 2021. "Inter-municipal cooperation in administrative tasks – the role of population dynamics and elections," Local Government Studies, Taylor & Francis Journals, vol. 47(4), pages 568-592, July.
    4. Andrew C. Eggers & Ronny Freier & Veronica Grembi & Tommaso Nannicini, 2018. "Regression Discontinuity Designs Based on Population Thresholds: Pitfalls and Solutions," American Journal of Political Science, John Wiley & Sons, vol. 62(1), pages 210-229, January.
    5. Thushyanthan Baskaran & Zohal Hessami, 2018. "Does the Election of a Female Leader Clear the Way for More Women in Politics?," American Economic Journal: Economic Policy, American Economic Association, vol. 10(3), pages 95-121, August.
    6. Chatterjee, Somdeep & Mookerjee, Mehreen & Ojha, Manini & Roy, Sanket, 2023. "Does increased credibility of elections lead to higher political competition? Evidence from India," European Journal of Political Economy, Elsevier, vol. 77(C).
    7. Thushyanthan Baskaran & Mariana Lopes da Fonseca, 2016. "Electoral thresholds and political representation," Public Choice, Springer, vol. 169(1), pages 117-136, October.
    8. Ivo Bischoff & Eva Wolfschuetz, 2017. "The Emergence of Inter-Municipal Cooperation – A Hazard Model Approach," MAGKS Papers on Economics 201744, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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    More about this item

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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