Institutions and geography together shape economic policies. Policy outcomes are agreed by incumbents whose decisions are influenced by a desire to win reelection. Their optimal reelection strategy depends on a country’s electoral institutions, which are the rules governing democratic elections. The geographic distribution of economic activity determines the best means to achieve incumbents’ optimal re-election strategy. Targeted economic policies, like subsidies, win votes. But the efficacy of subsidies as a vote-winning policy tool depend on a country’s institutions and economic geography. As a result, subsidies for the manufacturing sector constitute a larger share of government expenditures in plurality systems than in proportional systems when manufacturing employment is geographically concentrated. When manufacturing employment is geographically diffuse, governments in proportional systems assign relatively more of their budgets to manufacturing subsidies than governments in plurality systems, holding all else equal. This finding suggests economic geography can help to solve the debate over which democratic institutions generate the most particularistic economic policies. My argument also identifies the conditions under which governments are most likely to violate international economic agreements.