Binomial menu auctions in government formation

In a menu auction, players submit bids for all choices the auctioneer A can make, and A then makes the choice that maximizes the sum of bids. In a binomial menu auction (BMA), players submit acceptance sets (indicating which choices they would support), and A chooses the option that maximizes his utility subject to acceptance of the respective players. Monetary transfers may be implicit, but players may also bid by offering "favors" and the like. BMAs provide a unified representation of both monetary and non-monetary bidding, which I apply to model government formation. First, I analyze general BMAs, characterize the solution under complete information and establish outcome uniqueness (for both, sealed bid and Dutch formats). Second, in case monetary transfers are possible, BMAs are shown to implement VCG mechanisms. Finally, in case transfers are impossible, BMAs extend the model of proto-coalition bargaining and are specifically applied to government formation.menu auction; demand commitment; proto-coalition bargaining; VCG mechanism

A Theory of coalition Bargaining

When voting takes place in democratic institutions, we find (either explicitly or implicitly) that there is an agenda setter or a formateur. Such players are uniquely able to make substantive proposals for given topics. Their statuses remain intact even after rejection of proposals, but they must revise rejected proposals constructively (e.g. towards a compromise). We model this in a general environment, show that the equilibrium outcome is generically unique, and characterize it explicitely. The equilibrium outcome is robust to (partially) binding communication between the formateur and the voters. As illustrations, we consider majority bargaining about a cake (leaned on Baron and Ferejohn,1989),where the formateur ends up being a perfect dictator, and a model of legislative voting (leaned on Jackson and Moselle,2002), where he is a dictator if his ideological position is within the quartiles of the parliament. In these cases, our model implements (reversed) McKelvey majority path. Depending on the valuations, the formateur´s power may be weakened when parliamentary decisions can be revised, as this may faciliate tacit collusion amongst the voters. --coalitional bargaining,legislature,non-cooperative

Rhetoric in Legislative Bargaining with Asymmetric Information

In this paper we analyze a legislative bargaining game in which parties privately informed about their preferences bargain over an ideological and a distributive decision. Communication takes place before a proposal is offered and majority rule voting determines the outcome. When the private information pertains to the ideological intensities but the ideological positions are publicly known, it may not be possible to have informative communication from the legislator who is ideologically distant from the proposer, but the more moderate legislator can communicate whether he would "compromise" or fight" on ideology. If instead the private information pertains to the ideological positions, then all parties may convey whether they will "cooperate," "compromise," or fight" on ideology. When the uncertainty is about ideological intensity, the proposer is always better on making proposals for the two dimensions together despite separable preferences, but when the uncertainty is about ideological positions, bundling can result in informational loss which hurts the proposer.

Rhetoric in legislative bargaining with asymmetric information

We analyze a three-player legislative bargaining game over an ideological and a distributive decision. Legislators are privately informed about their ideological intensities, i.e., the weight placed on the ideological decision relative to the weight placed on the distributive decision. Communication takes place before a proposal is offered and majority rule voting determines the outcome. We show that it is not possible for all legislators to communicate informatively. In particular, the legislator who is ideologically more distant from the proposer cannot communicate informatively, but the closer legislator may communicate whether he would \compromise "or flight" on ideology. Surprisingly, the proposer may be worse off when bargaining with two legislators (under majority rule) than with one (who has veto power), because competition between the legislators may result in less information conveyed in equilibrium. Despite separable preferences, the proposer is always better off making proposals for the two dimensions together

Binomial menu auctions in government formation

In a menu auction, players submit bids for all choices the auctioneer A can make, and A then makes the choice that maximizes the sum of bids. In a binomial menu auction (BMA), players submit acceptance sets (indicating which choices they would support), and A chooses the option that maximizes his utility subject to acceptance of the respective players. Monetary transfers may be implicit, but players may also bid by offering "favors" and the like. BMAs provide a unified representation of both monetary and non-monetary bidding, which I apply to model government formation. First, I analyze general BMAs, characterize the solution under complete information and establish outcome uniqueness (for both, sealed bid and Dutch formats). Second, in case monetary transfers are possible, BMAs are shown to implement VCG mechanisms. Finally, in case transfers are impossible, BMAs extend the model of proto-coalition bargaining and are specifically applied to government formation

Essays on bicameral coalition formation: dynamics of legislative cooperation in the European Union

The thesis develops a theory of legislative cooperation in bicameral legislatures. At its core is a distinction between two decision-making scenarios leading to a concurrent majority in the two chambers. In an inter-institutional scenario, the chambers oppose each other as unitary actors. In a trans-institutional scenario, the constituent actors enter into cooperation across the boundaries of their chambers. The central argument is that formateurs face a strategic decision on which of these two routes to take. They can stick to their intra-institutional coalition, or they can abandon it and propose a logroll across issues within a bill that is carried by a majority across the chambers. The thesis comprises three papers, united by the general topic of trans-institutional legislative cooperation, and each demonstrating the crucial role of the formateurs. The empirical analysis focuses on co-decision legislation proposed in the bicameral system of the European Union between 1999 and 2009. In particular, it draws on a new dataset on early-stage and final-stage coalitions in the European Parliament and the Council of the EU. This is based on an extensive analysis of more than 18,000 Council documents and 19,000 amendments in the EP presenting for the first time a systematic insight into early-stage coalitions. Three central findings emanate from the application of the theoretical framework to the new data. First, formateurs can obtain an outcome closer to their preferences by choosing between inter- and trans-institutional scenarios. Second, the transaction costs of exchanges across institutional boundaries are lower if formateurs’ preferences are similar. Third, the decisions of the formateurs potentially produce winners and losers as some actors are included and others are excluded from the coalitions. These findings build on and further develop theories of bicameral coalition formation and legislative organisation. They highlight that the strategic environment in which actors operate surpasses their individual chamber, and explain how this affects the process and outcome of decision-making. This leads to important empirical and theoretical contributions which raise normative implications

Pre-electoral coalitions and the distribution of political power

Pre-electoral coalitions (PECs) may increase parties’ chances of winning an election, but they may also distort electoral results and policies away from citizens’ preferences. To shed light on how PECs shape post-electoral power distribution, we study the causes and consequences of PECs in Finland where elections use an open-list proportional representation system, and parties may form joint lists. We present descriptive evidence showing 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. PECs increase small parties’ chances of acquiring leadership positions, lead to more dispersed seat distributions, and sometimes prevent absolute majorities. They can thus enable a broader representation of citizens’ policy preferences

Pariahs or Partners? Patterns of Government Formation with Radical Right Parties in Central and Eastern Europe, 1990-2020

In the past three decades, radical right parties had the opportunity to directly influence political developments from the highest public office in many post-communist Central and Eastern European countries. The author provides the first comprehensive study on government formation with radical right parties in this region. Even after the turn of the millennium, some distinct features of the post-communist context persist, such as coalitions between radical right and centre-left parties. In addition to original empirical insights, the time-sensitive approach of this study also advances the discussion about concepts and methodological approaches within the discipline

Old friends and new enemies, parties in changing time and space

Political parties are the cornerstone of modern democracies and the decisions they make can have important consequences for citizens' well-being. This dissertation studies two different types of party behaviour. The first is coalition building and how social-identity concerns can help predict which parties form alliances. The second is the decision of potential new parties to enter electoral competition. The effect of social-identity on coalition formation is tested using an experiment on the 'pure effect' of gender, race and political ideology on who is selected as a coalition partner. The findings showed that gender and race did not affect participants' decisions. By contrast, ideology had a strong effect. Substantively, the results provide evidence that a preference for similar coalition partners can help predict which coalitions form, even when there are no policy benefits from this alliance to be gained. Party entry behaviour is analysed through two incentive structures. The first paper measures the impact of public subsidies on new-party presidential candidates in Latin America. The results show that campaign subsidies can increase the relative costs of a campaign and create a barrier for new-party candidate entry. On the other hand, campaign funding for everyday party activities has the opposite effect. This study contributes to the understanding of the cost-benefit incentives for new party entry and the consequences of party finance regulations. The second paper on new parties addresses the dynamic process of party exit and entry into politics. The study argues that the collapse of a political party opens policy space that can lead to the successful entrance of new parties. The results provide robust evidence that the size of the collapsed party has a positive effect on the vote shares for new parties. However, this is moderated by the permissibility of the electoral formula

Governing Abroad

From Austria to New Zealand, coalition governments often pave the road to foreign policy. In Western Europe, nearly 90 percent of postwar governments include two or more political parties. Israel, the Middle East’s only consolidated democracy according to many, has never experienced single-party rule in its history. Even the United Kingdom, known for its long streak of single-party rule, now navigates multiparty cabinets. Coalitions are everywhere, but we still have little understanding of how they act in foreign affairs. History shows that coalitions can sometime engage in powerful international commitments such as participating in military operations, but at other times, they postpone their decisions, water down their policy positions, or promise to do less than they otherwise would. What explains these differences in behavior? Governing Abroad unpacks the little-known world of coalition governments to find out. Oktay argues that the specific constellation of parties in government explains why some coalitions can make more assertive foreign policy decisions than others. Building on the rich literature in political science on coalitions, legislatures, and voting behavior, the book weaves together sophisticated statistical analyses of foreign policy events across thirty European countries alongside in-depth case studies from Denmark, the Netherlands, and Finland. It brings political parties back into the study of foreign policy, demonstrating that the size of the coalition, the ideological proximity of the governing parties, and their relationship with the parliamentary opposition together influence the government’s ability to act in the international arena. This book challenges our existing perceptions about the constraints and weaknesses of coalition governments. It sheds new light on the conditions that allow them to act decisively abroad