Elections have dominated the democratic world and much of the news flow in 2024. While they typically don’t affect markets longer term, the sheer number of elections this year has made them a significant point of interest for investors and has demonstrated significant disparities in electoral systems and representation.

Looking beyond the headlines to understand election outcomes in 2024

Nuances in the electoral systems of different countries and low voter turnout have led to quite different and, in some cases, surprising election results. Exploring the experiences of the UK, France and South Africa, who have already held their 2024 elections, offers context for understanding potential outcomes in the upcoming US election in November.

The UK uses a first-past-the-post system, with voters in each parliamentary constituency selecting one representative. The candidate with the most votes wins the council or constituency, irrespective of getting more or less than 50%. In July, 60% of eligible voters turned up at the polls. Nationally, a third of votes were cast for the ultimately victorious Labour Party. So, despite only getting 20% of the electoral vote, the Labour Party ended up with 63% of the seats in parliament.

In contrast, the Reform UK party received 9% of electoral votes, but gained a majority in very few individual constituencies. Despite a sizeable number of votes, they ended up with less than 1% of the seats. While this system provides clarity and decisiveness, critics do question whether it fully reflects the diverse political landscape of the country.

France employs a blend of direct and proportional representation. Legislative elections occur in two rounds. If a constituency gets no majority in the first, the two leading candidates face off in a second round. In their July election, the National Rally Party of Marine Le Pen won the most votes in the initial round. Left and centrist parties subsequently formed a coalition and, despite not getting the most votes in the first round, ultimately won the French election.