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What happens when voting rules change? the case of New Zealand

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Abstract

This paper examines the impact of New Zealand’s 1996 adoption of a mixed member proportional (MMP) voting scheme on representation in the legislature, voter turnout, vote volatility and the likelihood of an incumbent party winning re-election. I then consider whether MMP has had any negative consequences for the effectiveness of government policy in relation to fiscal accountability and countercyclical intervention. The data used in the analysis begins from the formation of the party system in New Zealand (in 1890) and extends through the adoption of MMP to the pre-pandemic present (2017). The data set covers 42 elections: 34 before 1996 and 8 after.

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Fig. 1

Source: New Zealand Electoral Commission and Data Appendix

Fig. 2

Source: New Zealand Electoral Commission and Data Appendix

Fig. 3

Source: New Zealand Electoral Commission and Data Appendix

Fig. 4

Source: New Zealand Electoral Commission and Data Appendix

Fig. 5

Source: New Zealand Electoral Commission and Data Appendix

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Notes

  1. The MMP system implemented in 1996 in New Zealand allowed each voter one ballot with 2 votes: one for a party and a second for a constituency representative. The constituency vote featured 65 geographically defined electorate seats (with 5 designated Maori-seats, the number depending on number of registered Maori voters) while the party vote resulted in 55 representatives from a closed list of party candidates, allocated to make the final distribution of seats mirror the vote percentages received by each represented party. The threshold for party representation was 5 percent of the vote or 1 electorate seat and the maximum governing term is 3 years. In the 2017 election the division was 71/49. The number of parties used in the entry-exit analysis is the number of parties registered in each election. The parties used in the calculation of the effective number of parties ENP are all those registered parties that received a recorded vote share in the official results. The vote of an individual or party contesting without receiving a recorded vote share is included in the category ‘other’.

  2. The party receiving the second largest seat share has always placed either first or second in terms of vote shares.

  3. While governing coalitions that exclude the first-place party can also arise under SMP, the likelihood of a minority party coalition under MMP is higher because new party entry typically results in a greater fragmentation of the vote and a decrease in the share of the vote going to the top two parties.

  4. The effective number of parties takes into account differences in the strength of parties by weighting each party by its share of the vote or seats won. More formally, ENP(x) = 1/\({\Sigma }\left( {x_{i}^{2} } \right)\), i = 1…N where x = vote or seat shares and N represents the total number of parties. When two parties share votes or seats equally, ENP = 2.

  5. In other SMP countries like Canada and India, the presence of distinct regional parties in national elections accounts for ENP(Seats) typically being larger than ENP(Votes). In New Zealand’s case, the difference appears to reflect the smaller size of the plurality needed to win a constituency in SMP elections. Some prominent examples of parties winning votes but not seats include: the Social Credit Party in 1981 that received 21% of the vote and won only 2 seats, the New Zealand Party in 1984 that received 12.5% of the vote and no seats, and the Green Party in 1990 that received 6.8% of the vote and won no seats.

  6. The elections leading into the referendum (1990 and 1993) also witnessed a smaller jump in number of entrants who appear to have anticipated a representational role arising under MMP.

  7. The looseness of parties in each governing coalition is indicated by the role of Winston Peters who as head of the New Zealand First Party has participated in both National (1996) and Labour (2005, 2017) governing coalitions.

  8. There remains a concern that because only a small number of seats are needed to form a majority coalition that some minority concerns will be overrepresented while others ignored.

  9. Vowles (p. 95, 1995) writes, “New Zealanders were responding to the destabilizing effects of party system dealignment, increasing disproportionality of election outcomes, and a succession of governments which many believed had ignored public opinion in their efforts to reform the economy”.

  10. It is often argued that using population as a base in the participation rate is flawed because of systematic changes in the eligible and noneligible parts of the population. To account for two aspects of this I use the discrete variables, Age20 and Age18, to capture discrete changes in the proportion of eligible voters arising from the lowering of the age limit on voting in 1969 and 1972.

  11. New Zealand’s MMP system features a closed rather than open party list. Sanz (2017) argues that this diminution of voter choice can account for voter turnout not rising as much as expected under MMP.

  12. Vowles (2010) attributes the fall in turnout to a decline in political competition and the age-cohort structure of the New Zealand population in this period.

  13. The average vote share received by the third and fourth placed parties following MMP is roughly the same as the average over the 1972–1993 pre-MMP period, although it is higher than that the average of the 1980′s.

  14. New Zealand sociologists have often noted that Maori participation in elections is somewhat lower than the rest of the population (see, for example, Sullivan, von Randow and Matiu, 2014 and Foster and Taylor, 2019).

  15. The official turnout ratio and the participation rate are stationary.

  16. Note that the adjustment to account from systematic changes in the proportion of the population that are eligible to vote make no difference to the equation findings.

  17. That is, \(\frac{\partial Official Turnout}{{\partial Size}} = 3.26 - .176*Average\_Seat\_Size\), or \(Size = 18.523\) when \(\frac{\partial Turnout}{{\partial Size}} = 0\). The corresponding peaks are 25.326 and 31.220 for the Nagel/Vowles and participation rate models.

  18. Age is another form of heterogeneity that could be used. To the extent that voter turnout rises with the average age of the population (Wolfinger and Rosenstone, 1980 , Endersby and Krieckhaus, 2008), the rising average age (documented in every Census since 1970) that would be expected to counter the fall in turnout experienced in New Zealand since the adoption of MMP.

  19. The use of central government debt (as a fraction of GDP) to represent the same type of effect works almost as well.

  20. The results are unchanged if the size of the winning margin is used instead. The volatility adjusted margin is preferred since the meaning of the winning margin is dependent upon the underlying scale of voter volatility.

  21. Geys (2006, p.648) finds 132 successes out of 259 estimates testing for a positive effect of ex post electoral closeness on turnout, or a 51 percent success rate. Cancela and Geys (2013) find a 68 percent success rate.

  22. Dropping debt from the equation results in the previous term’s growth rate becoming significantly positive (at 10 percent).

  23. Liberal corresponds to the Liberal Party (1890–1914) and the Labour Party (1919 through the present).

  24. The marginal effect on the deficit of a change in the growth rate from column (1) is \(\frac{\partial Deficit}{{\partial \left( {growth rate} \right)}} = - 0.206 - 2.34 MMP\), a deficit response that is ten times larger in the post MMP period from 1996 onward.

  25. That is, \(\frac{\partial Deficit}{{\partial \left( {growth rate} \right)}} = - 0.363 + 2.569 MMP\), reversing sign following the adoption of MMP.

  26. The threshold is either receiving 5 percent of the vote or winning one electorate seat.

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Acknowledgements

I would like to acknowledge the use of the National Library while in Wellington and thank two referees from this Journal for comments and suggestions that have improved the content and presentation of this paper. Neither are responsible for remaining errors or omissions.

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  1. Department of Economics, Carleton University, Ottawa, ON, K1S 5B6, Canada

    J. Stephen Ferris

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Appendices

Data Appendix

(See Table 6)

Table 6. A. Descriptive Statistics: Dataset can be found online at https://doi.org/10.5683/SP2/JU08NI
Full size table

B. Sources

  1. 1.

    Election data

    1890–1993, https://elections.nz/democracy-in-nz/historical-events/18901993-general-elections

    1996 onward, https://electionresults.org.nz/electionresults_1996/, individually through 2017

    Election results include registered voters, votes cast, and turnout.

    Franchise = registered voters/population

    Turnout = votes cast/registered voters

    Participation = votes cast/population

    Volatility \(= \frac{{\mathop \sum \nolimits_{p = 1}^{p = N} \left| {v_{pt - } v_{pt - 1} } \right|}}{2} ,\) where \(v_{pt}\) is the vote share of party p in election t and N = 8. This decomposes into:

    Volatility A = vote volatility/switching arising from entry/exit.

    Volatility B = vote switching among established parties.

    Win_seat_margin = the percentage difference in seats of the first versus second place seat finisher.

    Win_vote_margin = the percentage difference in votes of the first minus second place seat finisher.

    Vol_adjusted_winning_vote_margin = Win_vote_margin/volatility.

    D1978 = 1 in 1978; 0 otherwise

    Age20 = 1 for all years following 1969; 0 before

    Age18 = 1 for all years following 1972; 0 before

    Labour = 1 in years of Labour Party victories; 0 otherwise

    Liberal = 1 in years of Liberal Party victories; 0 otherwise

  2. 2.

    Economic Data: 1890 – 2001, downloaded Oct 20 2011; updated through 2017, January 2019. https://www.stats.govt.nz/browse_for_stats/economic_indicators/NationalAccounts/long-term-data-series.aspx (LTDS)

RGDP = Real Gross Domestic Product (Table e1–2 column AH in 2000$)

RGDPPC = Real Gross Domestic Product per capita (Table e1–2, column AK in 2000$)

D(.) = first difference operator

Growthpc = D[log(RGDPPC)]

RCGDebt = consolidated real central government debt (Table d4–1 column AJ in 2000$)

CGDebt_ratio = RCGDebt/RGDP

RCGE = Real Central government expenditures (Table d2–1 column AP in 2000$)

GSize = RCGE/RGDP

CGRev = Central government revenues (Table d1–1, 1867 -2002 breakdown sheet, Column U)

RCGRev = Real Central Government Revenues/CPI_2000 (Table d1–1 data sheet column U 2000 = 100)

TSize = RCGRev/RGDP

CG_Deficit = GSize – Tsize

CGDeficitratio = CG_Deficit/GDP

Population, archive.stats.govt.nz/browse_for_stats/population/estimates_and_projections/historical-population-tables.aspx

Unemployment rate, downloaded from Te Ara The Encyclopedia of New Zealand, www.TeAra.govt.nz

Maori—percentage of the population that is Maori, Historical Population Estimates, Table 4 Total and Maori populations www.stats.govt.nz. Interpolated between census years.

Exports 1890–1988 (LTDS Overseas Trade and Payments Table H.1.1); 1988 on www.stats.govt/nz/ Gross Domestic Product: December 2018 quarter supplementary Tables: Table 1

Imports 1890–1988 (LTDS Overseas Trade and Payments Table H.2.1); 1988 on www.stats.govt/nz/ Gross Domestic Product: December 2018 quarter supplementary Tables: Table 1

GDP nominal: 1890–1988 (LTDS National Income Table E.1.1); 1988 on www.stats.govt/nz/ Gross Domestic Product: December 2018 quarter supplementary Tables: Table 1

Openness = (exports + imports)/GDP.

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Ferris, J.S. What happens when voting rules change? the case of New Zealand. Const Polit Econ 31, 267–291 (2020). https://doi.org/10.1007/s10602-020-09312-8

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