Working Paper

Political Economy

Olle Folke

2010/25: Shades of brown and green: Party effects in proportional election systems

Small parties play an important role in proportional election systems. For example, the emergence and electoral success of environmental and anti-immigration parties have constituted one of the central changes in the political landscape in Europe over the last three decades. But we do not know if this has actually had any implications for policy, since no methods exist for credibly estimating the effect of legislative representation in proportional election systems. Because party representation is not randomly assigned, both observable and unobservable factors influence policy outcomes as well as party representation. Using a part of the legislative seat allocation that is as good as random, I estimate the causal effect of party representation on immigration policy, environmental policy and tax policy in Swedish municipalities. The results show that party representation has a large effect on the first two policies, but not on the tax policy.