Electoral Threshold, Representation, and Parties ’ Incentives to Form a Block.

In most countries with proportional representation systems, there is an election thresh-old, i.e., minimum share of popular vote (usually between 3 and 7 percent) that a party or an electoral block must receive in order to be represented in the parliament. We study theoretically effects of electoral threshold on ex-post representation in such sys-tems. In a model where professional politicians are office-motivated and strategic voters care about both ideology and professional skills of candidates, we find that distortion effects of electoral threshold depend crucially on the ability of a politician to commit to party affiliation prior to learning her position in the electoral list. In particular, without such ability, marginal increase in electoral threshold does not affect expected proportion-ality of representation. We also study the effect of electoral threshold on incentives for small parties to form an electoral block. We find that while small parties are jointly more motivated to form a block if the threshold is high rather than low, an individual small party does not necessarily find it more attractive, since the marginal benefit from increased probability of excluding its potential block partner may outweigh marginal cost