Elections and durable governments in parliamentary governments
| Date | 01 January 2018 |
| Author | David P Baron |
| DOI | 10.1177/0951629817729226 |
| Published date | 01 January 2018 |
| Subject Matter | Articles |
Article
Elections and durable
governments in parliamentary
governments
Journal of Theoretical Politics
2018, Vol. 30(1) 74–118
©The Author(s) 2017
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DOI:10.1177/0951629817729226
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David P Baron
Graduate School of Business, Stanford University, USA
Abstract
This paper provides a dynamic theory of a parliamentary government system with proportional-
representation elections, policy-motivated parties and voters, and an endogenous status-quo
policy. The theory identifies the representation of parties in parliament, the governments the
parties form, the policies chosen by those governments, and the duration of the governments
and their policies. Governments are majoritarian, government parties are equal partners, they
and their policies are durable, voters elect minority parliaments in every period, and government
policies provide concessions to centrist voters. If crises can occur, governments can fall, but a new
government forms after the next election. The theory provides explanations for three empirical
findings: equilibria consistent with Gamson’s law, an analog of Duverger’s law for proportional-
representation electoral systems, and compensational voting where voters give the out party
additional votes when an incumbent government is expected to continue in office.
Keywords
Durable governments; government formation; proportional representation
1. Introduction
Political systems in which the parliament chooses the executive are prevalent in Europe
and present in a number of countries outside Europe. The institutions of parliamen-
tary systems vary considerably among these countries, and abstracting from the insti-
tutional variation, this paper presents a dynamic theory of parliamentary governments
with proportional-representation electoral systems. The theory provides straightforward
predictions about representation, government formation, and policy choice. The paper
examines the incentives for policy-motivated parties to form and break governments and
policy-motivated voters to support or punish parties for the policies they implement. The
policy space is multidimensional, and the policies are continuing in the sense that they
Corresponding author:
David P Baron, Graduate School of Business, 655 Knight Way, Stanford CA 94305, USA.
Email: dbaron@stanford.edu
Baron 75
remain in place until changed by the parliament. The theory is thus dynamic. The focus
is on durable governments that, along with their policies, continue from one period to the
next. In the absence of crises, these governments continue indefinitely. Governments can
fall in a crisis, however.
The model of a parliamentary system is simple with little institutional detail. Voters
elect parliaments, the parties in parliament form governments, and governments choose
policies. The benchmark model is symmetric so as to be neutral with respect to which
governments form and for which party a voter votes. Voters base their votes on the
governments and policies they anticipate in current and future periods. The political equi-
libria characterized are Markov perfect equilibria in which strategies are conditioned on
a limited history of past actions, and neither parties nor voters can commit to their future
actions.
A continuum of equilibria exists with minority parliaments and durable majoritarian
governments, and the equilibrium policies can involvepolicy concessions to centrist vot-
ers. The equilibria are supported by implicit threats. One threat is that if a government
party defects and the government falls, a new government formation round commences
in the next period and the defector risks not being in the next government. A second
threat is that voters could give an out party a majority if the government parties deviate
from their policy promises. These threats are collective in the sense that they punish all
the government parties. Consensus governments cannot be supported by the threat of a
new government formation round nor can they can be supported by the threat of voters
giving another party a majority if a party defects from a consensus government.
Durable governments are supported by political equilibria whenpar ties are politically
patient, and in a certain world the political equilibria have infinitely durablegovernments
and policies. Governments, however, are not immune to crises that alter their policies. If
crises can occur, durable, but not infinitely so, governments form when crises are infre-
quent, and those governments continue until a crisis occurs. The government then falls,
and a new government forms in the next period. If the risk of a crisis is sufficiently
high, i.e., crises are expected to be frequent, a political equilibrium does not exist, since
the stake the parties have in preserving a government when it is likely to end in a cri-
sis is insufficient to withstand the temptation to take a short-term gain and risk a new
government formation round.
The governments predicted by the theory are minimal winning and include the for-
mateur. Martin and Stevenson (2001) present empirical evidence that governments in
parliamentary systems tend to be minimal winning and include the formateur. They also
find strong evidence that the incumbent coalition is included in the next government. The
stability of governments in parliamentary systems has been studied empirically, but sta-
bility is typically measured by the composition of the cabinet rather than the government
coalition or its policy.For example, Merlo (1998) finds that the average duration of Italian
governments for the period 1948–1991 was slightly less than one year, where duration
was measured by the time between when a new prime minister took office and when he
resigned. Despite the short duration, the Christian Democratic Party headed every gov-
ernment, often with the same coalition partners, and the Communist Party was always
excluded from the coalition. Nishikawa (2012) notes that, in addition to Italy, a single
party headed governments over extended periods in Israel and Sweden, and argues for a
focus on ruling party stability. The theory presented here focuses on coalition durability
76 Journal of Theoretical Politics 30(1)
and allows the leader of government to change within a durable coalition government.
When reallocable officeholding benefits are available, the policy can also change when
the leader of the government coalition changes.
Voters are assumed to be policy-motivated and forward-looking and hence antici-
pate the bargaining over government formation and the policies that could result from
that bargaining. Thus, voters may not vote for their preferred party. Empirical studies
of parliamentary systems find evidence of such behavior. For example, Kedar (2005, p.
185) ‘demonstrate[s] that voters are concerned with policy outcomes and hence incorpo-
rate the way institutions convert votes to policy into their choices. Since policy is often
the result of institutionalized multiparty bargaining and thus votes are watered down by
power-sharing, voters often compensate for this watering down by supporting parties
whose positions differ from (and are often more extreme than) their own.’1The theory
presented here shows that such voting behavior, which Kedar calls ‘compensational vot-
ing,’ is present in a political equilibrium. More specifically, the theory predicts that in an
election with an incumbent majoritarian government the out party has a larger vote share
than either government party. The direction of causation is that voters anticipate that the
incumbent government will continue and choose a policy favorable to its own interests,
so some voters who would otherwise votefor a government party prefer the out party and
its anticipated policy to the policy of the incumbent government.
The political equilibria characterized for the dynamic model differ considerably from
those in single-period models. For example, in the sequential bargaining model of Baron
and Ferejohn (1989), the formateur exercises bargaining power and takes a dispropor-
tionate share of the benefits. In the spatial model of Baron and Diermeier (2001), the
formateur chooses efficient policies but also takes a disproportionate share of the ben-
efits. Which governments form and their vote shares depend, importantly, on the status
quo. The equilibria characterized in the dynamic model are independent of the initial
status quo. The formateur party exercises bargaining power by excluding one of the
parties from a majoritarian government, but it has no bargaining advantage within the
government. That is, the government parties are equal partners, with the equilibrium
policies equidistant from the ideal policies of the government parties. The policies can
be coalition-efficient; i.e., at the midpoint of the contract curve of the government parties,
but there is a continuum of equilibria, in which policies provide concessions to centrist
voters. These equilibria retain the property that the government parties are equal part-
ners, but the policies are closer to the center of voter preferences. The closer the policies
are to the center of voter preferences, the more politically patient the parties must be to
sustain a political equilibrium. The more risk averse are the policy preferences of parties,
the less patient they need be to support a political equilibrium.
The result that the equilibrium policies in majoritarian governments are equidistant
from the ideal policies of the government parties is consistent with Gamson’s (1961) law,
which is typically stated as the proportion of ministries held by a government party is
proportional to its seat share in parliament. Parties here are policy-motivated rather than
office-motivated, and the analog of Gamson’s law is that the policyutilities of government
parties are proportional to their seat shares. In political equilibria supporting majoritarian
governments with equidistant policies, the government parties have equal vote shares,
and the utilities of the parties are directly proportional to their seat shares.
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