Introduction

The analyses presented in the previous chapters highlight our basic argument – SMD systems consistently yield lower real prices. This strong empirical regularity holds up not only in the advanced OECD countries, as shown in Chapter 3, but also in developing democracies, as shown in Chapter 4. In addition to empirical evidence amassed from the cross-national comparisons, the electoral system-to-prices link is further corroborated in our detailed study of the Italian case, where the shift toward a majoritarian system was followed by regulatory liberalization and a reduction of real prices.

As we elaborated in Chapter 2, PR systems’ association with higher real prices by no means contradicts the emerging consensus in the political economy literature that PR systems also enhance socioeconomic equality. However, here we explore the seeming paradox more fully.