Electoral systems and their influence on economic growth

Politicians, philosophers and economists have been arguing about the role of the government in a country’s economy for centuries. The government is an important economic agent, and it is the only agent whose actions can be controlled to some extent; it would be impossible to ‘control’ all consumers or firms in an economy. The government spending is decided upon by a relatively small group of people, but the economic impact of that spending is quite large (Galí et al., 2007; Cogan et al., 2010). Therefore, the way the government should spend money is a widely researched topic. Most high school economics students know Keynes’ antifcyclical budget policy (Keynes, 1933), and the field of policy economics has established itself as an important field within the economic science. This is understandable; if there is a governmental policy that can achieve a certain goal that we have in mind for our economy, then it might be a good idea to implement that policy. But what if we would take one step back? What if we could change the way an economy works, simply by changing the way we elect our politicians?