Theoretical comparisons of electoral systems

Abstract Elements of an economic theory of political institutions are introduced. A variety of electoral systems are reviewed. Cox's threshold is shown to measure incentives for diversity and specialization of candidates' positions, when the number of serious candidates is given. Duverger's law and its generalizations are discussed, to predict the number of serious candidates. Duverger's law is interpreted as a statement about electoral barriers to entry, and this idea is linked to the question of the effectiveness of democratic competition as a deterrent to political corruption. The impact of post-electoral bargaining on party structure in presidential and parliamentary systems is discussed. 1999 Elsevier Science B.V. All rights reserved. JEL classification: D72 Keywords: Electoral systems; Constitution; Election game; Incentives Invitation to political economics To honor Joseph Schumpeter, I should try to begin as he might, from a long view of the history of economic theory, observing that the scope of economics has changed. With an initial goal of explaining the production and allocation of material goods, economic theorists developed analytical tools to predict how changes in market structure may affect rational behavior of producers and consumers. As the principles of rational choice were first developed in this context of price-theoretic decision-making, it seemed sensible to separate the study of markets from the study of other great institutions of society, because 0014-2921/99/$ -see front matter 1999 Elsevier Science B.V. All rights reserved. PII: S 0 0 1 4 -2 9 2 1 ( 9 8 ) 0 0 0 8 9 -