From the Wikipedia page 
Overhang seats can arise in elections under the traditional (i.e. as it originated in Germany) mixed member proportional (MMP) system, when a party's share of the nationwide party votes entitles it to fewer seats than the number of constituencies it won.
Under MMP, a party is entitled to a number of seats based on its share of the total vote. If a party's share entitles it to ten seats and its candidates win seven constituencies, it will be awarded three list seats, bringing it up to its required number. This only works, however, if the party's seat entitlement is not less than the number of constituencies it has won. If, for example, a party is entitled to five seats, but wins six constituencies, the sixth constituency seat is referred to as an overhang seat.
Two mechanisms to earn many overhang seats Edit
The two mechanisms that together increase the number of overhang seats are:
- winning many constituencies;
- decreasing the number of party votes and therefore the number of seats to which the party is proportionally entitled.
In many countries, overhang seats are rare – a party that is able to win constituency seats is generally able to win a significant portion of the party vote as well. There are, however, some circumstances in which overhang seats may arise relatively easily:
- Few major parties, large number of minor parties – When there are only one or two major parties, but a relatively large number of minor parties that, combined, achieve a significant share of the total proportional vote, but fail to elect any constituency seats, the large parties often end up with overhang seats.
- Similar lead across constituencies – If one party wins all or most constituencies of a relevant area with a rather low margin, it would be more prone to overhang mandates than if different parties lead in different constituencies, with the same overall share of each of the parties. As such, if there a less differences between constituencies, overhang seats are more probable.
- A large number of constituencies compared with the total number of seats – If too many seats are used for constituencies, the remainder are less likely to ensure strict proportionality.
- Unevenly sized constituencies – Candidates that win small constituencies by a narrow margin do not generate enough votes to justify their full seats under a proportional system.
- Low turnout in some constituencies – This has the same effect as small constituencies. Furthermore, turnout and party preferences may be highly correlated, e.g. rural vs. urban areas.
- Small number of seats to be allocated – The higher the absolute number of constituencies, the more likely it is that different reasons for overhang seats will balance out between parties. E.g., after the German federal Bundestag election in 2013, the main reason for overhang seats was that some compensation happens for party's state lists instead of at the federal level only.
- Individual candidates with strong local followings – Sometimes, a particular politician will have strong support in their own constituency, but will belong to a party with very low support, even in their own area. The candidate will be elected based on their own qualities, but the party they belong to will not receive enough votes to justify the candidate's seat. In the case of independent candidates, this is usually guaranteed – they have no party at all, and so obviously cannot win votes under MMP's party-list proportional representation. However, some countries, such as New Zealand, have special rules dealing with independents – seats won by these candidates are exempted from the proportional system altogether.
- Regional parties – Parties based in a particular region may win a substantial number of constituency seats in that region without necessarily gaining a large share of the national vote. Parties focused on particular ethnic or religions minorities may also come under this category, particularly if seats are reserved for these groups.
- Tactical voting – Voters in countries such as Germany may cast two votes and they need not be for the same party. A voter might support one party in the list vote but vote for the candidate of another party in the local vote, perhaps because the former party lacks a candidate in his or her constituency or it has a candidate but he or she has little chance of winning. Parties that win many local seats but attract a reduced list vote may receive an overhang as a result.
- Decoy parties – Party labels in the constituencies can be deliberately mismatched with those in the proportional vote in an attempt to induce tactical voting. In Italy in 2001, two lists won a significant majority of the total number of first-past-the post seats, despite winning almost none of the proportional vote. The system, nicknamed scorporo, was not a type of additional member system in which overhangs could occur, it resulted in a significant distortion to the desired compensatory nature.
Dealing with overhang seatsEdit
Overhang seats are dealt with in different ways by different systems. The three main methods are:
- Allow the overhang – A party is allowed to keep any overhang seats it wins, but other parties are still awarded the same number of seats that they are entitled to. This means that a party with overhang seats has more seats than its entitlement. Other parties may be given additional list seats (sometimes called "balance seats" or [eveling seats) in order that they are not disadvantaged. This preserves the same ratio between parties as was established in the election. It also increases the size of the legislature, as overhang seats are added, and there may also be extra list seats added to counteract them. This system results is less proportional than full compensation, as the party with the overhang is still receiving a "bonus" above its proportional entitlement. The number of extra seats that may be created is sometimes limited to avoid an excessive increase in the size of the assembly, which approaches the second option. The New Zealand Parliament uses this system (without "balance seats"); one extra seat was added in the 2005 election and 2011 election, and two extra seats in the 2008 election. This system was also used in the German Bundestag (also without "balance seats") until 2013.
- Take the number of additional list seats off from the other parties' proportional entitlement – A party is allowed to keep any overhang seats it wins, and the corresponding number of list seats allocated to other parties is eliminated to maintain the number of assembly seats. This means that a party with overhang seats has more seats than its entitlement, and other parties have fewer. This approach is used in the Chamber of Deputies of Bolivia and the National Assembly of Lesotho. It was recently recommended by the Ontario Citizens' Assembly on Electoral Reform for adoption by the Legislative Assembly of Ontario, and the proposed Dual-member proportional representation system uses this approach as well. While for the first additional list seats are simply denied to parties, in the latter three cases, a fairer procedure was proposed of subtracting the constituency seats won by parties with overhang seats from the total number of seats and recalculating the quota (the largest remainder method]] was also recommended) to proportionally redistribute the list seats to the other parties.
- Non-awarding of overhang seats – A party is not allowed to keep any overhang seats it wins, with its number of seats actually being reduced until it fits the party's entitlement. This method raises the question of which constituency seats the party is not allowed to keep. After that is determined, it would then have to be decided who, if any, will represent these constituencies.
- Fully compensatory – Similar to Option 1. However, in this model other non-overhang parties will be compensated by receiving additional seats above their initial allocation to ensure full proportionality for all parties including the party with overhang seats which after additional list seats are created no longer has more of the total of assembly seats than it is proportionally entitled to. These bonus seats therefore serve to offset the "overhang bonus" described in Option 1. After the Federal Constitutional Court of Germany ruled in 2008 that the established implementation of Option 1 was unconstitutional (because in rare instances, it allowed votes to negatively affect the number of seats for a given party, contradicting the voter's will), full compensation of overhang seats is applied as of 2013 in the German Bundestag by providing for the first time for the creation of national leveling seats.