The endogeneity problem in electoral studies: a critical re-examination of Duverger’s mechanical effect

Studies of electoral law consequences typically treat electoral laws as exogenous factors affecting political party systems, even while acknowledging that political parties often tailor electoral institutions to suit their own distributional needs. This study represents a departure from that approach, directly examining one aspect of the endogeneity of electoral systems: the endogeneity of Duverger’s ‘mechanical’ effect. Theory clearly posits that the Duvergerian ‘psychological’ effect of electoral rules occurs in anticipation of their reductive mechanical effect, yet in empirical models this endogenous character is typically ignored. In this paper I formalize the two types of Duvergerian effects of electoral laws in a structural model and implement this model using two-stage-least-squares regression to re-estimate the mechanical effect model of Amorim Neto and Cox [Electoral institutions, cleavage structures, and the number of parties. Am. J. Polit. Sci. 41 (1997) 149-174] and Cox [Making Votes Count: Strategic Communication in the World’s Electoral Systems. Cambridge University Press (1997)]. I also generalize the model and compare it to two other approaches taken by Ordeshook and Shvetsova [Ethnic heterogeneity, district magnitude, and the number of parties. Am. J. Polit. Sci. 38 (1994) 100-123] and Taagepera and Shugart [Predicting the number of parties: a quantitative model of Duverger’s mechanical effect. Am. Polit. Sci. Rev. 87 (1993) 455464]. The results indicate that because electoral structure affects the number of parties in the legislature both directly through the mechanical effect as well as indirectly through the psychological effect, simple OLS estimates that do not take into account this endogenous Previously presented at the 1999 Annual Meeting of the American Political Science Association, Atlanta Mariott Marquis and Atlanta Hilton and Towers, September 2–5, 1999. A full replication dataset is available upon request from the author. The author thanks Gary Cox and Mike Harrison for ideas and comments and Matthew Shugart for assistance with his original dataset. * Tel.: +353-1-608-2941; fax: +353-1-677-0546. E-mail address: [email protected] (K. Benoit). 0261-3794/01/$ see front matter  2001 Elsevier Science Ltd. All rights reserved. PII: S 02 61 -3794( 00 )0 0033-0 36 K. Benoit / Electoral Studies 21 (2002) 35–46 model will overestimate the mechanical effect by 45–100%.  2001 Elsevier Science Ltd. All rights reserved.