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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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  • Gerald Pech, 2004. "Coalition Governments Versus Minority Governments: Bargaining Power, Cohesion and Budgeting Outcomes," Public Choice, Springer, vol. 121(1), pages 1-24, October.
  • Handle: RePEc:kap:pubcho:v:121:y:2004:i:1:p:1-24
    DOI: 10.1007/s11127-004-4326-7
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    References listed on IDEAS

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    1. Merlo, Antonio, 1997. "Bargaining over Governments in a Stochastic Environment," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 101-131, February.
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    Cited by:

    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.

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