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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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File URL: http://hdl.handle.net/10.1007/s11127-004-4326-7
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Publisher 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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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Von Hagen, J., 1992. "Budgeting Procedures and Fiscal Performance in the European Communities," European Economy - Economic Papers 96, Commission of the EC, Directorate-General for Economic and Financial Affairs (DG ECFIN).
  2. 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. [Downloadable!] (restricted)
  3. Merlo, Antonio, 1997. "Bargaining over Governments in a Stochastic Environment," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 101-31, February.
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  4. Torsten Persson & Gerard Roland & Guido Tabellini, 2000. "Comparative Politics and Public Finance," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1121-1161, December. [Downloadable!] (restricted)
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  5. Diermeier, Daniel & Merlo, Antonio, 2000. "Government Turnover in Parliamentary Democracies," Journal of Economic Theory, Elsevier, vol. 94(1), pages 46-79, September. [Downloadable!] (restricted)
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  6. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "A Structural Model of Government Formation," Econometrica, Econometric Society, vol. 71(1), pages 27-70, January. [Downloadable!] (restricted)
  7. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659 Elsevier. [Downloadable!] (restricted)
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  8. Huber, Gerald & Kocher, Martin & Sutter, Matthias, 2003. " Government Strength, Power Dispersion in Governments and Budget Deficits in OECD-Countries: A Voting Power Approach," Public Choice, Springer, vol. 116(3-4), pages 333-50, September. [Downloadable!] (restricted)
  9. 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. [Downloadable!] (restricted)
  10. 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.
  11. Edin, Per-Anders & Ohlsson, Henry, 1991. "Political determinants of budget deficits: Coalition effects versus minority effects," European Economic Review, Elsevier, vol. 35(8), pages 1597-1603, December. [Downloadable!] (restricted)
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  12. 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. [Downloadable!] (restricted)
  13. 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.
  14. 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. [Downloadable!]
  15. 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. [Downloadable!] (restricted)
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  1. 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. [Downloadable!] (restricted)
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