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Trade, Institutions and Social Policy in the Long Run

Constitutions
Elections
Welfare State
Johannes Lindvall
Lunds Universitet
Johannes Lindvall
Lunds Universitet

Abstract

On average, tariffs are lower in countries with proportional electoral systems than in countries with majoritarian electoral systems. Using data on trade, institutions, and social policies in the rich democracies from the interwar period to the 1990s, I argue that this well-known empirical regularity is best explained by the fact that proportional electoral systems produce more generous social policies, compensating losers from trade, and therefore lessening opposition to trade liberalization. The alternative theory -- that majoritarian systems are more protectionist since legislators elected in single-member districts are more sensitive to protectionist pressures -- is shown to be of secondary importance.