Ideological Diversity of Legislatures and Institutional Change

ABSTRACT This paper presents data on ideology‐adjusted fractionalization of legislatures for an unbalanced panel of 76 countries over 1970–2019. Drawing from the V‐Party database, I combine a wide variety of positions and stances of political parties with their seat shares to construct a new index of lower‐chamber ideological diversity by country‐year. I then employ this index to empirically explore its effect on good‐for‐growth regulatory reform in up to 65 countries over 2000–2019. I provide evidence of an inverse‐U relationship between the magnitude of policy change and ideological fractionalization, and show that policy coherence declines as fractionalization increases. Implications for growth are discussed.