Coalition Governance Institutions in Parlamentary Democracies - Strom

Choosing Institutions

What kind of governance institutions do coalition parties choose, and why? Under what conditions should we expect to see more or less complete contracts, and when should centralized authority be preferred to decentralized solutions, or vice versa? We have argued above that the problems involved in forging coalitions stem from such factors as uncertainty, preference diversity, and lack of control over the political environment. We expect the same set of factors to influence the form and contents of coalition agreements, as well as the specific institutions they set up.

More concretely, this means that we expect to see more complete agreements, and more elaborate institutions for their enforcement, the lower the relevant transaction costs. That is to say, the lower the price of time spent in negotiation, the more observable the relevant behavior, and the lower the cost of enforcement, the more complete we would expect coalition agreements to be.

This logic yields several...

testable predictions concerning the conditions favoring comprehensive vs. minimal agreements.

Number of Coalition Parties. Comprehensive coalition agreements are less likely to emerge the greater the bargaining complexity. The larger the number of parties that have to be involved in the process of crafting an agreement, the more costly such negotiations are likely to be in time and opportunity costs. Complex bargaining situations heighten transaction costs, and high transaction costs lead to the adoption of less comprehensive agreements. Bargaining complexity, in turn, is in large part a function of the number of parties to the coalition contract (see Laver and Schofield 1990). We expect comprehensive coalition agreements to be least common under conditions of great bargaining complexity, that is, where there is a greater number of parties to the agreement. Hence, the larger the number of coalition parties, the less comprehensive we expect the agreement to be.

Length Of (Remaining) Term. The

The characteristics of coalition agreements will also reflect the situations in which they were drafted. Briefly, the more durable the coalition is expected to be, the more the transaction costs of drafting a comprehensive agreement can be over the coalition's life span. If the term of a coalition will be short (e.g., because the parliamentary term is expiring), it will often not be worthwhile for the parties involved to invest much time and effort in coalition negotiations and thus to hammer out an authoritative and comprehensive coalition agreement. The extreme case would be caretaker governments, which are likely to have no coalition agreement or at most a very simple one. We also expect pre-electoral coalition agreements to be shorter than post-electoral ones, given the uncertainty under which pre-electoral agreements are always crafted. Finally, countries with a longer parliamentary term should have coalition agreements that are more comprehensive than those in countries with

shorter parliamentary terms. What, then, is likely to determine whether authority under incomplete agreements will be centralized or decentralized? In their analysis of formal and real authority in organizations, Aghion and Tirole (1997: 27) find that authority is most likely to be delegated to the agent in decisions (1) that matter little to the principal, (2) on which the agent can be trusted by the principal, due to a high degree of preference congruence (ex ante probability of preference "innovative" similarity), (3) that matter greatly to the agent, and (4) that are sufficiently that the principal has limited competency.

Preference Diversity. The second of these conditions is of direct and particular importance to coalition politics, in so far as preference congruence translates into preference diversity within the coalition. In accordance with Aghion and Tirole, we expect centralization of authority within the coalition to be positively correlated with the ideological diversity of the coalition.

Maintaining compliance tends to be less challenging in policy-compact cabinets. Single-party cabinets, therefore, should be more conducive to ministerial government, as described by Laver and Shepsle, than coalitions of several parties. Among coalitions, we expect those that cover a large policy range to have more centralized governance structures than those that are ideologically compact. In interparty coalitions, we expect the degree of ideological diversity to be a good and significant measure of the attendant congruence (Warwick 1994). Preference diversity may also result from electoral competitiveness. The more competition between the coalition partners, the more they will feel the need to impose coalition discipline. Competition can be operationalized as ex ante indeterminacy of electoral contests, which we can empirical approximate as the closeness, in votes and seats, of contests between the coalition parties (Strøm 1989 and 1992). Size. Aghion and Tirole also find centralized

authority to be preferable in situations in which much is at stake for the principal (condition 1). In coalition politics, such stakes may be correlated with the cabinet's susceptibility to parliamentary defeat (and thereby, perhaps, resignation). This, in turn, is in large measure a function of its size. Since Riker (1962), students of coalition politics have focused on the implications of majority status, specifically whether coalitions attain minimal winning status, that is, have enough votes to control parliamentary decisions without carrying unnecessary members. The size principle, of course, predicts that only coalitions of minimal winning size will form. However, the very feature (minimal winning status) that maximizes payoffs to the coalition's participants also maximizes its exposure to defection. By definition, minimal winning coalitions may be brought down (or at least reduced to minority status) by any one of their members. We therefore also expect that minimal winning coalitions

will extract the10most explicit (tight) commitments from their members. Surplus majority coalitions, by contrast,can afford to lose members and may therefore be less insistent on such explicit commitments.Minority cabinets presumably have to be prepared to negotiate outside support anyway, whichmeans that strict commitments from parties inside the cabinet are of less use to them. We mighttherefore expect them to exhibit less discipline and less comprehensive agreements than minimalwinnning coalitions, though perhaps more than surplus majority administrations.

Thus, in summary we have the following expectations concerning the comprehensiveness anddistribution of authority in coalition agreements:

Hypothesis 1: The larger the number of coalition parties, the less comprehensive the agreement.

Hypothesis 2: The shorter the expected duration of the coalition, the less comprehensive theagreement. Hence, the later in the parliamentary term the coalition is negotiated, the lesscomprehensive the agreement.

Hypothesis 3: The greater the preference diversity within the coalition, the more centralized the distribution of authority and the greater the discipline imposed on the parties. Hence, the greater the ideological distance and the more intense the electoral competition between coalition partners, the tighter the agreement.

Hypothesis 4: The more politically susceptible the coalition is to parliamentary defeat, the more centralized the distribution of authority and the greater the discipline imposed on the parties. Hence, minimal winning coalitions should feature the most centralized governance institutions and surplus majority coalitions should exhibit the lowest degree of centralization.

DESIGN AND DATA

This study explores coalition agreements in 13 Western European parliamentary democracies. Although our study is confined to Western Europe, we cover all major systems in this heartland of parliamentary democracy in which coalition politics is a regular occurrence. We have

excludedonly countries with a very small population (and in which the scholarly literature is often spottyand potential contributors scarce) and those in which coalition politics is exceptional rather thannormal (e.g., the United Kingdom). The data cover the entire post-World War II period, from thefirst post-war cabinet until June 30, 1996 (with the exceptions of France, where we cover only theFifth Republic, and Portugal, where we cover only the period since its transition to democracy).

A cabinet is the set of politically appointed executive offices involved in top-level national policy4making. Our cabinet data have been collected by experts on the respective countries involved. Apreliminary version of the data set is presented in Müller and Strøm (1997).

When does the life ofone cabinet end and that of another begin? In this analysis, we count a change of cabinet with theoccurrence of any one of the following conditions:

1. Any change in the set of parties holding

We count as members of the cabinet those and only those parties that have designated representatives with cabinet voting rights. Thus, we do not count external support parties, i.e., parties that support the cabinet in parliament without holding cabinet portfolios.

Any change in the identity of the prime minister. By prime minister, we mean in this study the head of the cabinet, whatever title that office might have (e.g., federal chancellor, president of the council of state, etc.).

Any general election, whether mandated by the end of the constitutional interelection period (CIEP) (see King et al., 1990), or precipitated by a premature dissolution of parliament.

Coalition agreements are defined as the most binding, written statements to which the parties of a coalition commit themselves, i.e. the most authoritative document that constrains party behavior. Coalition agreements may be formal or informal, and they may be intended for internal use only or designed for

public consumption.

COALITION AGREEMENTS: TYPES AND CONTENTS

We now turn to the actual coalition agreements to examine their structure and contents across the various countries and coalitions in our sample. Our scrutiny of the data will be highly preliminary and exploratory, as we have not yet been able to design appropriate tests of the propositions developed above. There are three general issue areas contained in coalition agreements: (1) policy, (2) office allocation, and (3) procedure. Some coalitions have substantial and explicit policy agreements. Coalition agreements, formal or informal, impose various degrees of coalition discipline in parliamentary votes, as well as in other parliamentary activities.

Type

Let us first examine the incidence and types of coalition agreements. As Table 1 demonstrates, of the 223 coalition cabinets in our sample, 136 (61 %) have been based on a coalition agreement. There are nonetheless great cross-national differences. Coalitions are invariably based on

the period analyzed) are typically formed through negotiations between political parties. These agreements outline the policy priorities and goals of the coalition government. In Finland, coalition agreements are commonly referred to as "government programs" and are usually made between multiple parties. The agreements detail the government's policy agenda and the division of ministerial positions among the coalition partners. Luxembourg follows a similar approach, with coalition agreements being negotiated between parties before the formation of the government. These agreements outline the policy objectives and the distribution of ministerial portfolios. In Norway, coalition agreements are known as "government platforms" and are negotiated between parties before the formation of the government. These platforms outline the government's policy priorities and the division of responsibilities among the coalition partners. Portugal also follows a similar process, with coalition agreements being negotiated between parties before the formation of the government. These agreements outline the policy goals and the distribution of ministerial positions among the coalition partners. In Sweden, coalition agreements are negotiated between parties after the general election. These agreements outline the government's policy priorities and the division of ministerial positions among the coalition partners. Overall, coalition agreements play a crucial role in shaping the policy direction of coalition governments in these countries. They provide a framework for cooperation and ensure that the coalition partners are aligned on key policy issues.