Proportional influence? Electoral rules and special interest spending

Conventional wisdom has it that proportional representation leads to more coalition governments and so to greater government spending, especially in redistributive categories favoured by special-interest groups. In contrast, we show in a theoretical model that first-past-the-post systems of government may give special interests greater influence in the winning electoral coalition than they would have in the corresponding legislative coalition under proportional representation. Evidence from a quasi-experimental reform in German local government supports this view. Introduction of a mayor directly elected under first-past-the-post rules caused a significant increase in local government expenditure, particularly in redistributive spending categories.