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Coalition Governments Versus Minority Governments: Bargaining Power, Cohesion and Budgeting Outcomes

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  • Gerald Pech

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Abstract

Recent empirical work investigating the role of minoritygovernments in the selection of fiscal policies has shown thatthe majority status does not affect the budget size. Thispaper presents an analytical framework which accounts for thisresult. It combines a government formation game and a budgetgame involving cabinet and parliament. A general indifferenceresult applies. An exogenous shock to the bargaininigenvironment which absorbes the cohesion of the governmentincreases the demand for expenditures. At the same time theconditions for the formation of a minority government arefulfilled. If the formateur is strong, a minority governmentcan be a device for cutting expenditures. Copyright Kluwer Academic Publishers 2004

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 121 (2004)
Issue (Month): 1 (October)
Pages: 1-24

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Handle: RePEc:kap:pubcho:v:121:y:2004:i:1:p:1-24

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Web page: http://www.springerlink.com/link.asp?id=100332

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  1. Harrington, Joseph E, Jr, 1990. " The Power of the Proposal Maker in a Model of Endogenous Agenda Formation," Public Choice, Springer, vol. 64(1), pages 1-20, January.
  2. Edin, P-A. & Ohlsson, H., 1990. "Political Determinants Of Budget Deficits: Coalition Effects Versus Minority Effects," Papers 1990k, Uppsala - Working Paper Series.
  3. Gerald Pech, 2001. "Government Formation, Budget Negotiations and Re-election Uncertainty: The Cases of Minority and Majority Coalition Governments," CRIEFF Discussion Papers 0115, Centre for Research into Industry, Enterprise, Finance and the Firm.
  4. Huber, Gerald & Kocher, Martin G. & Sutter, Matthias, 2003. "Government strength, power dispersion in governments and budget deficits in OECD-countries. A voting power approach," Munich Reprints in Economics 18164, University of Munich, Department of Economics.
  5. repec:fth:eeccco:96 is not listed on IDEAS
  6. Persson, Torsten & Roland , Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," Seminar Papers 633, Stockholm University, Institute for International Economic Studies.
  7. Gerald Pech, 2000. "Deficits, Coalition Effects and the Timing of Decisions," CRIEFF Discussion Papers 0023, Centre for Research into Industry, Enterprise, Finance and the Firm.
  8. Torsten Persson & Guido Tabellini, 1999. "Political Economics and Public Finance," NBER Working Papers 7097, National Bureau of Economic Research, Inc.
  9. de Haan, Jakob & Sturm, Jan-Egbert, 1994. " Political and Institutional Determinants of Fiscal Policy in the European Community," Public Choice, Springer, vol. 80(1-2), pages 157-72, July.
  10. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "A Structural Model of Government Formation," Econometrica, Econometric Society, vol. 71(1), pages 27-70, January.
  11. Roubini, Nouriel & Sachs, Jeffrey D., 1989. "Political and economic determinants of budget deficits in the industrial democracies," European Economic Review, Elsevier, vol. 33(5), pages 903-933, May.
  12. de Haan, Jakob & Sturm, Jan-Egbert, 1997. "Political and economic determinants of OECD budget deficits and government expenditures: A reinvestigation," European Journal of Political Economy, Elsevier, vol. 13(4), pages 739-750, December.
  13. Volkerink, Bjorn & De Haan, Jakob, 2001. " Fragmented Government Effects on Fiscal Policy: New Evidence," Public Choice, Springer, vol. 109(3-4), pages 221-42, December.
  14. Diermeier, Daniel & Merlo, Antonio, 1998. "Government turnover in parliamentary democracies," Bulletins 7453, University of Minnesota, Economic Development Center.
  15. Merlo, Antonio, 1996. "Bargaining over governments in a stochastic environment," Bulletins 7476, University of Minnesota, Economic Development Center.
  16. de Haan, Jakob & Sturm, Jan-Egbert & Beekhuis, Geert, 1999. " The Weak Government Thesis: Some New Evidence," Public Choice, Springer, vol. 101(3-4), pages 163-76, December.
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Cited by:
  1. Gerald Pech, 2000. "Deficits, Coalition Effects and the Timing of Decisions," CRIEFF Discussion Papers 0023, Centre for Research into Industry, Enterprise, Finance and the Firm.
  2. Jochen Mierau & Richard Jong-A-Pin & Jakob de Haan, 2007. "Do political variables affect fiscal policy adjustment decisions? New empirical evidence," Public Choice, Springer, vol. 133(3), pages 297-319, December.
  3. Gerald Pech, 2001. "Government Formation, Budget Negotiations and Re-election Uncertainty: The Cases of Minority and Majority Coalition Governments," CRIEFF Discussion Papers 0115, Centre for Research into Industry, Enterprise, Finance and the Firm.

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