Laurent Bouton (Georgetown University)
"Shedding New Light on the Economic Effects of Constitutions"
This paper revisits the economic effects of constitutions. We propose a model of governmental resource allocation under political competition and contrast majoritarian and proportional representation systems. We derive predictions regarding the relationship between resource allocation and local characteristics that differ depending on the electoral system. In contrast with conventional wisdom, we identify a sprinkling effect that may lead to a more unequal allocation of resources under proportional representation than under a majoritarian system. Using satellite nightlight data as a geo-localized measure of government intervention and population as the source of local heterogeneity, we find support for the patterns predicted by our model.