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Bicameralism and Government Formation

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  • 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
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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. Diermeier, Daniel & Merlo, Antonio, 1998. "Government Turnover in Parliamentary Democracies," Working Papers, C.V. Starr Center for Applied Economics, New York University 98-31, C.V. Starr Center for Applied Economics, New York University.
  2. Merlo, A., 1992. "Bargaining Over Governments in a Stochastic Environment," Working Papers, C.V. Starr Center for Applied Economics, New York University 92-55, C.V. Starr Center for Applied Economics, New York University.
  3. 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.
  4. Antonio Merlo & Charles Wilson, 1997. "Efficient delays in a stochastic model of bargaining," Economic Theory, Springer, Springer, vol. 11(1), pages 39-55.
  5. Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, Econometric Society, vol. 55(5), pages 999-1033, September.
  6. Roger B. Myerson & Daniel Diermeier, 1999. "Bicameralism and Its Consequences for the Internal Organization of Legislatures," American Economic Review, American Economic Association, American Economic Association, vol. 89(5), pages 1182-1196, December.
  7. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "A Structural Model of Government Formation," Econometrica, Econometric Society, Econometric Society, vol. 71(1), pages 27-70, January.
  8. Merlo, Antonio & Wilson, Charles A, 1995. "A Stochastic Model of Sequential Bargaining with Complete Information," Econometrica, Econometric Society, Econometric Society, vol. 63(2), pages 371-99, March.
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Citations

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Cited by:
  1. Persson, Torsten & Roland, Gerard & Tabellini, Guido, 2007. "Electoral Rules and Government Spending in Parliamentary Democracies," Quarterly Journal of Political Science, now publishers, vol. 2(2), pages 155-188, May.
  2. Amedeo Piolatto, 2009. "Plurality versus proportional electoral rule: study of voters' representativeness," Working Papers. Serie AD, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) 2009-14, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  3. Per Fredriksson & Daniel Millimet, 2007. "Legislative Organization and Pollution Taxation," Public Choice, Springer, Springer, vol. 131(1), pages 217-242, April.
  4. Yves Breitmoser, 2012. "Proto-coalition bargaining and the core," Economic Theory, Springer, Springer, vol. 51(3), pages 581-599, November.
  5. Carmignani, Fabrizio, 2009. "The distributive effects of institutional quality when government stability is endogenous," European Journal of Political Economy, Elsevier, vol. 25(4), pages 409-421, December.
  6. Torsten Persson & Gerard Roland & Guido Tabellini, 2003. "How Do Electoral Rules Shape Party Structures, Government Coalitions and Economic Policies?," Working Papers 251, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  7. Diermeier, Daniel & Eraslan, Hulya & Merlo, Antonio, 2002. "Coalition governments and comparative constitutional design," European Economic Review, Elsevier, Elsevier, vol. 46(4-5), pages 893-907, May.
  8. Breitmoser, Yves, 2011. "Binomial menu auctions in government formation," MPRA Paper 28576, University Library of Munich, Germany.
  9. 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.
  10. Carraro, Carlo & Sgobbi, Alessandra, 2007. "Modelling Negotiated Decision Making: A Multilateral, Multiple Issues, Non-Cooperative Bargaining Model with Uncertainty," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6424, C.E.P.R. Discussion Papers.
  11. 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.

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