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Bargaining In Legislature: Number Of Parties And Ideological Polarization

  • Oskar Nupia


This paper studies whether a government party always prefers to negotiate with another compact party rather than with many different parties in a legislature. We claim that the interaction between ideological polarization and number of parties plays an important role in this decision. We start by modeling two types of legislatures: The 2-parties legislature, in which the government party negotiates with another compact party; and the m+1-parties legislature, in which it negotiates with m>2 parties. Parties negotiate on both a public (ideological) and a distributive (private) policy. Our main result shows that the government party does not always prefer to negotiate in a bilateral situation. If the level of ideological polarization in the 2-parties legislature is high enough, it prefers to negotiate with m less polarized parties. We also find that if there are two legislatures with the same number of parties, the government party prefers to negotiate in that with the smallest level of ideological polarization.

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Paper provided by UNIVERSIDAD DE LOS ANDES-CEDE in its series DOCUMENTOS CEDE with number 004282.

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Length: 24
Date of creation: 21 Oct 2007
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Handle: RePEc:col:000089:004282
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  1. Woo, Jaejoon, 2003. "Economic, political, and institutional determinants of public deficits," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 387-426, March.
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  3. Jackson, Matthew O. & Moselle, Boaz, 2002. "Coalition and Party Formation in a Legislative Voting Game," Journal of Economic Theory, Elsevier, vol. 103(1), pages 49-87, March.
  4. 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.
  5. Nouriel Roubini & Jeffrey Sachs, 1989. "Government Spending and Budget Deficits in the Industrial Economies," NBER Working Papers 2919, National Bureau of Economic Research, Inc.
  6. Robert Elgie & Iain McMenamin, 2008. "Political fragmentation, fiscal deficits and political institutionalisation," Public Choice, Springer, vol. 136(3), pages 255-267, September.
  7. Weingast, Barry R & Shepsle, Kenneth A & Johnsen, Christopher, 1981. "The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 642-64, August.
  8. Gilat Levy, 2004. "A model of political parties," LSE Research Online Documents on Economics 540, London School of Economics and Political Science, LSE Library.
  9. 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.
  10. Perotti, Roberto & Kontopoulos, Yianos, 2002. "Fragmented fiscal policy," Journal of Public Economics, Elsevier, vol. 86(2), pages 191-222, November.
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