Does proportional representation increase redistribution? Evidence from early 20th century Norwegian municipalities

Abstract

Countries that use proportional representation (PR) tend to have higher levels of redistribution. However, persuasive research on electoral system choice has demonstrated that countries only adopt PR under particular circumstances, such as the presence of a strong left-wing opposition or a need for coordination between opposing economic actors. A fundamental, unresolved question is therefore if the strong relationship between the use of PR and redistribution is due to PR electoral rules or these background factors. Taking advantage of an electoral reform to early 20th century Norwegian local elections, we find that municipalities that were mandated to use PR increased tax rates and resources spent on the poor but also redistributed less in the first place. We further show that the reform did not increase left-wing party seat shares but did increase political mobilization. This evidence is consistent with moderate parties increasing redistribution in order to preempt left-wing party gains.