Cabinet Formation in Coalition Systems
| Date | 01 August 2001 |
| Published date | 01 August 2001 |
| Author | Fabrizio Carmignani |
| DOI | http://doi.org/10.1111/1467-9485.00201 |
{Journals}sjpe/48_3/c162/makeup/c162.3d
CABINET FORMATION IN COALITION
SYSTEMS
Fabrizio Carmignani*
ABSTRACT
Theoretical and empirical issues concerning the political bargaining process over
cabinet formation in coalition systems are addressed in this paper. A set of
theoretical predictions is tested using a sample of 13 western European countries
observed throughout the period 1950± 1995. It appears that the formation delay is
increasing in the degree of ideological heterogeneity of coalition partners and that
the share of portfolios secured by the formateur is decreasing in the degree of
complexity of the bargaining environment. A few factors affecting the degree to
which the outcome of the negotiation process can be defined as balanced are also
identified.
II
NTRODUCTION
Cabinet formation in coalition systems is essentially a problem of allocation of
decision-making power among a set of political parties holding different policy
views. Policy decisions depend upon the outcome of this political bargaining
process, so that a good understanding of economic policy-making does require
the preliminary investigation of how the cabinet is formed. This makes the
analysis of cabinet formation of interest to both economists and political
scientists.
In this paper, theoretical and empirical aspects of the formation process are
investigated. On the theoretical side, the focus is on the representation of the
political bargaining game. An innovative version of the war of attrition approach
is proposed together with an intuitive discussion of other possible representations
derived from more traditional approaches explored in the game-theoretic
literature on bargaining. On the empirical side, the predictions derived from the
theoretical representations are used as the guidelines for an econometric analysis
of some important features of cabinet formation in a sample of thirteen coalition
systems observed throughout the post-war era. In particular, attention is devoted
to the determinants of the length of negotiations, to the determinants of the share
of portfolios secured by the formateur party and to the degree to which the
outcome of the bargaining process can be defined as balanced.
Scottish Journal of Political Economy,Vol.48,No.3,August2001
#Scottish Economic Society 2001,Publ ishedby Blackwell Publishers Ltd, 108 Cowley Road, Oxford OX4 1JF, UK and
350 Main Street, Malden, MA 02148, USA
313
*Universita
ÁStatale di Milano-Bicocca and Glasgow University
{Journals}sjpe/48_3/c162/makeup/c162.3d
The added value of this work can be summarised as follows. First, systematic
econometric testing of theoretical models of bargaining has been only recently
undertaken (see for example, Laver and Shepsle, 1996; Merlo, 1997; and
Diermeier and Merlo, 1998a). However, existing contributions in this area tend
to focus on predictions from a unique theoretical model and this often implies
that the empirical analysis can address only a limited set of issues. In this paper,
the explicit consideration of different theoretical forms of bargaining offers the
opportunity to empirically tackle a fairly broad range of questions. Second, I
make use of a newly constructed political data set (Carmignani, 1999a and
2000). This includes several indicators not considered in the existing applied
literature and that are likely to better capture some of the aspects of interest of
the cabinet formation process. Third, the technical set up of the war of attrition I
propose is such that, contrary to the standard situation encountered in existing
applications, players happen to be uncertain about their own valuation of
the prize of the game. This requires identifying the equilibrium under the
assumption that players have only incomplete information about their own
nature.
The rest of the paper is organised as follows. In Section II the theoretical
model of war of attrition is presented in some length. The theoretical
implications from other two models of bargaining are discussed on intuitive
grounds. Section III contains the econometric analysis. Section IV concludes
and sets the lines for future research. The definition of the variables is given in
Appendix A. Appendix B provides a short technical description of some of the
political indicators.
II THEORETICAL REPRESENTATIONS OF POLITICAL BARGAINING
Bargaining over cabinet formation as a war of attrition
Moving from the observation of factual evidence, political scientists have
emphasised that cabinet formation in coalition systems is essentially a problem
of distribution of decision-making power among coalition partners through the
allocation of a small set of key portfolios. Key portfolios are those whose
jurisdiction extends over the dimensions of the policy space regarded by voters
and politicians as the most important-ones.1The evidence provided by Laver
and Hunt (1992) on the ranking of portfolios in western European coalition
systems suggests that the most sought-after prize in the political bargaining
game is the control of the portfolio of finance (top-ranked in all the countries
surveyed).
1See for example the collection of experts' reports in Laver and Shepsle (1994). Political
scientists agree that the decision-making process has a strong departmental character: the
contents of the policy to be undertaken in a specific area heavily reflect the preferences of the
party in control of the portfolio with jurisdiction over that area. Thus, control of key portfolios
is a necessary condition for parties to be able to orientate the process of policy formation
towards their most preferred outcome.
314 FABRIZIO CARMIGNANI
#Scottish Economic Society 2001
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