Electoral reform and party-system fragmentation: diminishing marginal effects and vote–seat conversion limits in Chile’s concurrent local elections

Evidence on the impact of electoral reform on party systems in new democracies is limited. This study analyses 1,725 Chilean municipal contests (2004-2021), leveraging automatic, population-triggered increases in council district magnitude and the concurrent timing of first-past-the-post mayoral and proportional representation council elections. Using a difference-in-differences design and mixed-effects models, larger district magnitudes are found to increase the effective number of vote-winning parties, though the marginal effect diminishes at higher magnitudes. Concurrent FPTP elections heighten vote-level fragmentation but not seat-level fragmentation, reflecting conversion limits under proportional representation. Institutional effects materialise gradually over several electoral cycles. The findings show that institutional design exerts an independent effect on party-system fragmentation beyond social structures, extending the institutions-first logic to a subnational PR setting in a new democracy and showing how automatic seat adjustments provide causal leverage for identifying institutional effects.