Literature Introduction: 'Spending to Win' - Explaining Economic Policy through Electoral Systems and Economic Geography

It is impossible for any politician to gain uniform support from all voters. While considering the characteristics of the electoral system and the actions of opposing candidates, they must strategically choose which voters to gather support from. The economic policies a politician favors will change depending on the attributes of the voters they incorporate into their support base.

Therefore, the idea that the characteristics of an electoral system have a significant impact on a politician's economic policy has become a matter of course for political scientists. However, previous research has also pointed out that analyzing electoral systems alone cannot fully explain the policy choices politicians make.

A researcher named Rickard identifies the reason why electoral systems alone cannot explain everything and attempts to solve it in the work Spending to Win: Political Institutions, Economic Geography, and Government Subsidies (2018). This book is the latest research explaining that it is only by analyzing electoral systems and economic geography together that one can begin to explain the policy choices of politicians.

Rickard, S. J. 2018. Spending to Win: Political Institutions, Economic Geography, and Government Subsidies. New York: Cambridge University Press.

1 Who gets what and why? The politics of particularistic economic policy
2 Geographical inequality of economic activity
3 How institutions and geography work together to influence policy
4 Explaining government spending on industrial subsidies
5 Procedural power: Skillfully seeking state subsidies
6 Why institutional differences in proportional representation matter
7 Policy effects of electoral competition in closed-list systems
8 Conclusion and discussion

Previous research has reported that in democratic countries, ruling parties use clientelistic strategies to distribute a wide variety of benefits to their supporters in exchange for votes. However, because the influence of geography was not sufficiently analyzed in previous studies, there was a tendency to try to explain political party strategies solely through the characteristics of the electoral system.

For those who are not usually interested in politics, electoral systems are generally divided into single-member district systems and proportional representation systems. While Japan uses a combination of the two, some countries adopt only one or the other.

Theoretically, it was predicted that countries adopting a single-member district system, where one candidate is elected per district to be sent to parliament, would be more inclined toward economic policies that favor specific regions—particularly the distribution of subsidies—than countries adopting a proportional representation system, where seats are allocated according to the percentage of votes each party receives. This is because, under a single-member district system, politicians can clearly see where their supporters live, and it is expected that they can solidify support by providing favors to those regions.

From this perspective, comparative political scientists have investigated which electoral system is more likely to lead to subsidy administration that favors specific regions. However, when data was collected and analyzed, it was confirmed that there are cases where subsidy administration favoring specific regions is implemented even in countries with proportional representation systems.

Rickard believes that the confusion stems from attempting to analyze while excluding the influence of geography. For example, the Norwegian parliament uses a proportional representation system based on 19 counties, but its industrial structure is skewed toward certain oil-related businesses, and many Norwegian citizens are employed in those businesses. It is thought that because of this geographical bias in economic activity, the Norwegian government allocates a large budget to subsidy administration.

Beyond Norway, the author compares the electoral systems and industrial locations of various countries. Chapter 5, which analyzes the differences between subsidy administration for cognac producers in France and wine producers in Austria, can be said to be one of the most interesting research findings presented in this book. The European Union attempts to regulate policies where member states use subsidies to politically strengthen their own industrial competitiveness, but examples of manipulating subsidies to prepare for the next election are endless.

The author introduces a case where the European Commission discovered that the Italian government had paid 15 million euros in subsidies to a hotel company located in Sardinia in 2008, criticized this as a violation of European Union international rules, and ordered the Italian government to recover it. Since the amount actually recovered by the Italian government seven years later in 2015 was only 2 million euros, the European Commission ordered the payment of a 20 million euro lump-sum fine and daily fines through the Court of Justice of the European Union.

Although this book does not analyze Japanese politics in great detail, it is an achievement that cannot be overlooked when considering the political influence of democracy on economic policy. Political scientists will need to increasingly and actively incorporate the findings of economic geography research in the future. Furthermore, by incorporating such a perspective, it should become easier to analyze the political effects that all economic policies possess.

It has been pointed out in Japan as well that economic policies, including subsidy administration, are important for the Liberal Democratic Party's strategy, but by taking Japan's economic geography into account, it will become possible to identify the LDP's support base in even greater detail.

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