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Public R&D under different electoral rules: evidence from OECD countries

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Abstract

Despite research on R&D and innovation policies, the effect of constitutional rules in this area has not received adequate attention yet. The paper contributes to filling this research gap by proposing that electoral systems affect governments’ decisions regarding R&D spending. It is expected that investment in R&D is closer to a bounded public good than to transfer payment. Therefore, governments in countries with majoritarian electoral rules should be willing to use this instrument to influence election outcomes. Both the amount invested and structure of funding is expected to depend on whether a government is elected via proportional or majoritarian rules. The analysis covers 25 OECD countries between 1981 and 2014, and relies on panel data analysis. The findings suggest that governments elected under majoritarian rules project higher government budget appropriations or outlays for research and development (GBAORD) than governments elected under proportional rules. Furthermore, GBAORD is more fragmented thematically in countries with proportional electoral rules.

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Notes

  1. Also see European Commission’s Joint Research Centre’s Research and Innovation Observation country reports.

  2. Except for New Zealand, where a reform has changed the electoral system in 1996.

  3. The end result is the effective number of funded socio-economic objectives. Consider the similarity with the inverse HHI as a measure of the effective number of parties.

  4. Except section U (activities of extraterritorial organisations and bodies).

  5. Countries with majoritarian electoral systems include Canada, the United Kingdom, the United States, and New Zealand (for a part of the time-series). Countries with proportional electoral systems include Austria, Belgium, the Czech Republic, Germany, Denmark, Spain, Estonia, Finland, Greece, Hungary, Ireland, Iceland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Sweden, and New Zealand (for a part of the time-series). Therefore, the distribution of countries regarding their electoral systems in unequal and may affect the results.

  6. The coefficient of interaction variable is higher than the coefficient of the fragmentation.

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  1. ISM University of Management and Economics, Arklių 18, 01305, Vilnius, Lithuania

    Pijus Krūminas

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Appendices

Appendix 1: Pooled OLS and random effects models

See Tables 4, 5, 6 and 7.

Table 4 Results for hypothesis 1 from pooled OLS. Dependent variable—GBAORD as share of GDP.
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Table 5 Results for hypothesis 1 from random effects. Dependent variable—GBAORD as share of GDP.
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Table 6 Results for hypothesis 2 from pooled OLS. Dependent variable—GBAORD fragmentation.
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Table 7 Results for hypothesis 2 from random effects model. Dependent variable—GBAORD fragmentation.
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Appendix 2

See Table 8.

Table 8 Country coverage.
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Krūminas, P. Public R&D under different electoral rules: evidence from OECD countries. Const Polit Econ 30, 300–329 (2019). https://doi.org/10.1007/s10602-019-09283-5

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