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The term rotten borough (or pocket borough, as they were seen as being "in the pocket" of a patron) refers to a parliamentary borough or constituency in the Kingdom of England (pre-1707), the Kingdom of Great Britain (1707-1801) and the Kingdom of Ireland (1536-1801) which due to size and population, was 'controlled' by a patron and used by a patron to exercise undue and unpresentative influence within parliament. Though rotten boroughs existed for centuries the term rotten borough only came into usage in the 18th century.
The true Rotten Borough was a borough of a ridiculously small electorate. The pocket borough was a borough constituency with a small enough electorate to be under the effective control of a major landowner.
In some constituencies and boroughs, due to the small number of electors, the post of Member of Parliament could effectively be bought. Because the constituencies were not realigned as population shifts occurred, MPs from one borough might represent only a couple of people (giving those people a relatively large degree of political representation), whereas entire cities (such as Manchester) might have no representation at all. Examples include: Old Sarum in Wiltshire had eleven voters, Dunwich in Suffolk had 32 voters (the bulk of the settlements in the borough having fallen into the sea), Plympton Earle with 40 voters, and Newtown on the Isle of Wight with 23 voters (all figures for 1831). All of these boroughs could elect two MPs. At one point, out of 405 elected MPs, 293 were chosen by less than 500 voters. (Spielvogel) Many such rotten boroughs were controlled by peers who 'gave' the seats to their sons, they thus having influence in the House of Commons while also holding seats themselves in the House of Lords. The Duke of Wellington, prior to being awarded a peerage served as MP for the rotten borough of Trim in County Meath in the Irish House of Commons.
In addition, there were boroughs where parliamentary representation was in the control of one or more 'patrons' by their power to either nominate or other machinations, such as burgage. Patronage and bribery were rife during this period. In some cases, wealthy individuals could "control" multiple boroughs -- the Duke of Newcastle is said to have had seven boroughs "in his pocket".
The pocket boroughs were seen (particularly by their owners) in the early 19th-century as a valuable method of ensuring the representation of the landed interest in the House of Commons.
In the 19th century measures began to be taken against rotten boroughs, notably the Reform Act of 1832 which abolished most rotten boroughs and spread parliamentary seats more closely to population centres and significant industries. Many pocket boroughs were retained.
The final abolition of pocket boroughs took until the Reform Act of 1867 where the borough franchise was significantly extended it was established that seats should be distributed based principally on population. Successive Reform Acts and Representation of the People Acts set up the Boundary Commission to ensure equitable representation on a rolling basis.
The introduction of the secret ballot in the 1880s helped prevent patrons from controlling districts, as they could no longer examine an individual's vote prior to its casting, electors as a result for the first time having the freedom to cast votes as they, not their landlord, wished. At the same time the practice of 'treating' the electorate (gifts of money or extravagant entertainment from candidates to voters) was outlawed; election expenses fell dramatically.
Today, "rotten borough" is sometimes used to refer to a parliamentary constituency in which one particular political party has such massive support that its candidate is effectively uncontested; a more polite term is "safe seat".
It is also used to refer to allegedly corrupt branches of local government - Private Eye has a column entitled Rotten Boroughs which lists stories of municipal wrongdoing.
"[Borough representation is] the rotten part of the constitution." -- William Pitt the Elder
See also: gerrymander