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Abstract

We rely on a reform in the German federal state of Hesse that abolished a 5 % electoral threshold for local elections to study the effects of electoral thresholds on political representation. The elimination of the threshold had, on average, a stronger effect on municipalities with larger councils since implicit (also known as effective) electoral thresholds are inversely correlated with council size. Using a dataset that includes all 426 Hessian municipalities over the period 1989–2011 and exploiting discontinuities in a state law that maps populations exogenously to council size, we implement a difference-in-discontinuities design. Our results show that the reform had large psychological effects that eventually improved the electoral prospects of (relatively small) local parties. In the short-run, however, the vote and seat shares of the large national parties increased. We offer some explanations for this finding.