Pre-Electoral Coalitions: Insights into the Creation of Political Parties

We evaluate the causes and consequences of pre-electoral coalitions (PECs). In Finland, local elections use a proportional representation system with open lists, and parties may form joint lists. We document that PECs are more common between parties of equal size and similar ideology, and when elections are more disproportional or involve more parties. Using both difference-in-diffeFinnish elections use an open-list proportional representation system, and parties may form pre-electoral coalitions (PECs) in the form of joint lists. We document that PECs are more common between parties of equal size and similar ideology, and when elections are more disproportional or involve more parties. Using difference-in-differences and density discontinuity designs, we illustrate that voters punish coalescing parties and target personal votes strategically within the coalitions, and that PECs are formed with the particular purpose of influencing the distribution of power. They increase small parties' chances of acquiring leadership positions, lead to more dispersed seat distributions, and sometimes prevent absolute majorities. We discuss the implications of these findings for the boundaries of political parties.