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Bicameralism and Government Formation

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Author Info

  • Antonio Merlo

    (Department of Economics, University of Pennsylvania and CEPR.)

  • Daniel Diermeier

    (MEDS, Kellogg School of Management, Northwestern University)

  • Hülya Eraslan

    (Finance Department, Wharton School, University of Pennsylvania)

Abstract

In this paper we present a structural approach to the study of government formation in multi-party parliamentary democracies. The approach is based on the estimation of a stochastic bargaining model which we use to investigate the effects of specific institutional features of parliamentary democracy on the formation and stability of coalition governments. We then apply our methodology to estimate the effects of governmental bicameralism. Our main findings are that eliminating bicameralism does not affect government durability, but does have a significant effect on the composition of governments leading to smaller coalitions. These results are due to an equilibrium replacement effect: removing bicameralism affects the relative durability of coalitions of different sizes which in turn induces changes in the coalitions that are chosen in equilibrium.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2004.81.

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Date of creation: May 2004
Date of revision:
Handle: RePEc:fem:femwpa:2004.81

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Keywords: Political stability; Government formation; Government dissolution; Bicameralism; Comparative constitutional design;

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References

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  1. Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, vol. 55(5), pages 999-1033, September.
  2. 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.
  3. Diermeier, Daniel & Merlo, Antonio, 2000. "Government Turnover in Parliamentary Democracies," Journal of Economic Theory, Elsevier, vol. 94(1), pages 46-79, September.
  4. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "A Structural Model of Government Formation," Econometrica, Econometric Society, vol. 71(1), pages 27-70, January.
  5. Merlo, Antonio & Wilson, Charles A, 1995. "A Stochastic Model of Sequential Bargaining with Complete Information," Econometrica, Econometric Society, vol. 63(2), pages 371-99, March.
  6. Roger B. Myerson & Daniel Diermeier, 1999. "Bicameralism and Its Consequences for the Internal Organization of Legislatures," American Economic Review, American Economic Association, vol. 89(5), pages 1182-1196, December.
  7. Antonio Merlo & Charles Wilson, 1997. "Efficient delays in a stochastic model of bargaining," Economic Theory, Springer, vol. 11(1), pages 39-55.
  8. Antonio Merlo, 1998. "Economic Dynamics And Government Stability In Postwar Italy," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 629-637, November.
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Citations

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Cited by:
  1. Torsten Persson & Gerard Roland & Guido Tabellini, 2003. "How Do Electoral Rules Shape Party Structures, Government Coalitions, and Economic Policies?," NBER Working Papers 10176, National Bureau of Economic Research, Inc.
  2. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "The Effects of Constitutions on Coalition Governments in Parliamentary Democracies," PIER Working Paper Archive 03-037, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  3. Alessandra Sgobbi & Carlo Carraro, 2007. "Modelling Negotiated Decision Making: a Multilateral, Multiple Issues, Non-Cooperative Bargaining Model with Uncertainty," Working Papers 2007.81, Fondazione Eni Enrico Mattei.
  4. Torsten Persson & Gerard Roland & Guido Tabellini, 2006. "Electoral Rules and Government Spending in Parliamentary Democracies," Levine's Working Paper Archive 321307000000000706, David K. Levine.
  5. Breitmoser, Yves, 2011. "Binomial menu auctions in government formation," MPRA Paper 28576, University Library of Munich, Germany.
  6. Piolatto, Amedeo, 2008. "Electoral systems and the distortion of voters' preferences," MPRA Paper 12610, University Library of Munich, Germany, revised 08 Jan 2009.
  7. Diermeier, Daniel & Eraslan, Hulya & Merlo, Antonio, 2002. "Coalition governments and comparative constitutional design," European Economic Review, Elsevier, vol. 46(4-5), pages 893-907, May.
  8. Yves Breitmoser, 2012. "Proto-coalition bargaining and the core," Economic Theory, Springer, vol. 51(3), pages 581-599, November.
  9. Antonio Merlo, 2005. "Whither Political Economy? Theories, Facts and Issues," PIER Working Paper Archive 05-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Dec 2005.
  10. Per Fredriksson & Daniel Millimet, 2007. "Legislative Organization and Pollution Taxation," Public Choice, Springer, vol. 131(1), pages 217-242, April.

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