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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. repec:fth:eeccco:96 is not listed on IDEAS
  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.
  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.
  4. Torsten Persson & Guido Tabellini, 1999. "Political Economics and Public Finance," NBER Working Papers 7097, National Bureau of Economic Research, Inc.
  5. Persson, Torsten & Roland , Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," Seminar Papers 633, Stockholm University, Institute for International Economic Studies.
  6. Diermeier, Daniel & Merlo, Antonio, 2000. "Government Turnover in Parliamentary Democracies," Journal of Economic Theory, Elsevier, vol. 94(1), pages 46-79, September.
  7. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "A Structural Model of Government Formation," Econometrica, Econometric Society, vol. 71(1), pages 27-70, January.
  8. 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.
  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. 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.
  11. 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.
  12. 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.
  13. 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.
  14. Edin, P-A. & Ohlsson, H., 1990. "Political Determinants Of Budget Deficits: Coalition Effects Versus Minority Effects," Papers 1990k, Uppsala - Working Paper Series.
  15. 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.
  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. 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.
  3. 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.

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