Coalition government or federalism? The relationship between policy distance and institutional design

Takaharu ISHII

Abstract


Abstract. This study theorises the political system after the introduction of democracy through one mechanism: federalism and coalition government. This study shows that if a stable ruling party can be constituted by a coalition government without a federal system, then either the coalition government is maintained or a single party runs the state government as the ruling party, without devolving as much power to the regions as in a federal system. However, if there is a strong opposition party and the ruling party cannot be expected to have sufficient policy effectiveness, and if the opposition is strong enough in some regions to be the opposition party in the national government but the ruling party in the regions if federalism is introduced, then both the ruling party and the opposition party will benefit from federalism. Incentives then arise for both the ruling party and the opposition to reduce the powers of the state as a state and increase the powers of local government. Institutional designers choose whether to introduce federalism or to constitute a coalition government as a way of optimising investment for policy by the parties as well as the balance between policy distance between parties and the size of the parties.

Keywords. Coalition governments; Federalism, Policy distance, Relation-specific investment.

JEL. P26; P48; L38.

Keywords


Coalition governments; Federalism, Policy distance, Relation-specific investment.

Full Text:


References


Andewegn, R.B., & Lia, N. (1995). Beyond the two body image: Relations between ministers and MPs. In H. Doring (Ed), Parliaments and Majority Rule in Western Europe, (pp.152-178), New York: St. Martin's Press.

Austen-Smith, D, & Banks, J. (1988). Elections, coalitions, and legislative outcomes. American Political Science Review, 82(2), 405-422. doi. 10.2307/1957393

Axelrod, R. (1970). Conflict of interest; A theory of divergent goals with applications to politics. American Political Science Review, 64(4), 1259-1261. doi. 10.2307/1958375

Aumann, R., & Myerson, R. (1988). Endogenous formation of links between players and of coalitions. in A. Roth (ed.), The Shapley Value, (pp.175-191), Cambridge: Cambridge University Press.

Alesina, A., & Spoalore, E. (1997). On the number and size of nations. Quarterly Journal of Economics 112(4), 1027-1056. doi. 10.1162/003355300555411

Baron, D. (1993). Government formation and endogenous parties.” American Political Science Review, 87(1), 34-47. doi. 10.2307/2938954

Baron, D., & Ferejohn, J. (1989). Bargaining in legislatures. American Political Science Review, 83(4), 1181-1206. doi. 10.2307/1961664

Besley, T., & Coate, S. (1997). An economic model of representative democracy. Quarterly Journal of Economics, 112(1), 85-114. doi. 10.1162/003355397555136

Bolton, P., & Roland, G. (1997). The break-up of nations: A political economy analysis. Quarterly Journal of Economics, 112(4), 1057-1090. doi. 10.1162/003355300555420

Buchanan, J., & Tullock, G. (1962). The Calculus of Consent. University of Michigan Press: Ann Arbor.

Besley, T., & Case, A. (1995). Incumbent behavior: vote-seeking, tax-setting and yardstick competition. American Economic Review, 85(1), 25-45.

Calvert, R., & Dietz, N. (1996). Legislative coalitions in a bargaining model with externalities. Social Choice and Strategic Decisions, 227-247. doi. 10.1007/3-540-27295-X_9

Cai, H., & Treisman, D. (2004). State corroding federalism. Journal of Public Economics, 88, 819-843. doi. 10.1016/S0047-2727(02)00220-7

Cai, H., & Treisman, D. (2005). Does competition for capital discipline governments? Decentralization, globalization and public policy. American Economic Review 95:817–830. doi. 10.1257/0002828054201314

Coate, S. (1997). Distributive policy making as a source of inefficiency in presentative democracies. Institute of Economic Research, University of Pennsylvania, Working Paper, No.97-041.

Cremer, J., Estache, A., & Seabright, P. (1994). The decentralization of public services : lessons from the theory of the firm. The World Bank, Policy Research Working Paper Series, No.1345. [Retrieved from].

Dahl, R. (1971). Polyarchy. New Haven: Yale University Press.

Deemen, A. van. (1991). Coalition formation in centralized policy games.” Journal of Theoretical Politics, 3(2), 139–161. doi. 10.1177/0951692891003002002

Deemen, A. van. (1997). Coalition Formation and Social Choice. Kluwer Academic Publishers, Dordrecht.

Ellingsen, T. (1998). Externalities versus internalities: A model of political integration. Journal of Public Economics, 68(2), 251-268. doi. 10.1016/S0047-2727(97)00090-X

Ferejohn, J., Morris, F., & McKelvey, R. (1987). Sophisticated voting and agenda independence in the distributive politics setting. American Journal of Political Science, 31(1), 167-193. doi. 10.2307/2111329

Grofman, B. (1982). A dynamic model of protocoalition formation in ideological N-space. Behavioral Science, 27(1), 77–90. doi. 10.1002/bs.3830270108

Huber, J.D., & Lupia, A. (2001). Cabinet instability and delegation in parliamentary democracies. American Journal of Political Science, 45(1), 18-32. doi. 10.2307/2669357

Inman, R., & Rubinfeld, D. (1997a). Rethinking federalism, Journal of Economic Perspectives, 11(4), 43-64. doi. 10.1257/jep.11.4.43

Inman, R., & Rubinfeld, D. (1997b). The political economy of federalism. in D.C. Mueller, (ed), Perspectives on Public Choice: A Handbook, Cambridge: Cambridge University Press.

Jackson, M., & Moselle, B. (2002). Coalition and party formation in a legislative voting game. Journal of Economic Theory, 103(1), 49-87. doi. 10.1006/jeth.2000.2688

Kahan, J., & Rapoport, A. (1984). Theories of coalition formation. Lawrence Erlbauw Associates Publishers: Hillsdale.

Kirchsteiger, G., & Puppe, C. (1997). On the formation of political coalitions. Journal of Institutional and Theoretical Economics, 153(2), 293–319.

Laver, M., & Shepsle, K. (1990). Coalitions and cabinet government. The Academic Political Science Review, 3, 873–890. doi. 10.2307/1962770

Laver, M., & Shepsle, K. (1996). Making and Breaking Governments; Cabinet and Legislatures in Parliamentary Democracies. Cambridge University Press: Cambridge.

Laver, M., & Shepsle, K.A. (1994). Cabinet Ministers and Parliamentary Government. Cambridge: Cambridge University Press.

Laever, M., & Shepsle, K.A. (1996). Making and Breaking Governments. Cambridge: Cambridge University Press.

Lockwood, B. (1998). Distributive politics and the benefits of decentralization. CSGR Working Paper, No.10/98. [Retrieved from].

McKelvey, R., Ordeshook, P., & Winer, M. (1978). The competitive solution for N-person games without transferable utility with an application to committee games. American Political Science Review, 72(2), 599-615. doi. 10.2307/1954112

Myerson, R. (2014). Constitutional structures for a strong democracy: considerations on the government of Pakistan. World Development, 53, 46-64. doi. 10.1016/j.worlddev.2013.01.005

Oates, W. (1972). Fiscal Federalism. Harcourt Brace: New York.

Osborne, M., & Slivinski, A. (1996). A model of political competition with citizen-candidates. Quarterly Journal of Economics, 111(1), 65-96. doi. 10.2307/2946658

Peleg, B. (1980). A theory of coalition formation in committees. Journal of Mathematical Economics, 7(2), 115-134. doi. 10.1016/0304-4068(80)90001-4

Peleg, B. (1981). Coalition formation in simple games with dominant players. International Journal of Game Theory, 10, 11-33. doi. 10.1007/BF01770068

Persson, T., & Tabellini, G. (1994). Does centralization increase the size of government?. European Economic Review, 38(3-4), 765-773. doi. 10.1016/0014-2921(94)90112-0

Persson, T., & Tabellini, G. (1996a). Federal fiscal constitutions: Risk sharing and redistribution. Journal of Political Economy, 104(5), 979-1009.

Persson, T., & Tabellini, G. (1996b). Federal fiscal constitutions: Risk sharing and moral hazard. Econometrica, 64(3), 623-646. doi. 10.2307/2171864

Powell, G.B. (2000). Elections as Instruments of Democracy: Majoritarian and Proportional Visions. New Haven: Yale University Press.

Riker, W. (1962). The Theory of Political Coalitions. New Haven: Yale University Press.

Rubinfeld, D. (1987). The economics of the local public sector, in A.J. Auerbach & M. Feldstein, (eds), Handbook of Public Economics II, New York: Elsevier Science Publishers.

Schofield, N. (1993). Political competition and multiparty coalition governments. European Journal Political Research, 23(1), 1–33. doi. 10.1111/j.1475-6765.1993.tb00346.x

Schofield, N. (1993). Party competition in a spatial model of coalition formation. In W. Barnett, M.J. Hinich, & N. Schofield (eds.), Political Economy; Institutions, Competition and Representation. Cambridge University Press: Cambridge.

Schofield, N. (1995). Coalition politics; a formal model and empirical analysis. Journal of Theoretical Politics, 7(3), 245-281. doi. 10.1177/0951692895007003002

Seabright, P. (1996). Accountability and decentralisation in government: an incomplete contracts model. European Economic Review, 40(1), 61-89. doi. 10.1016/0014-2921(95)00055-0

Shapley, L.S., & Shubik, M. (1954). A method for evaluating the distribution of power in a committee system, American Political Science Review, 48(3), 787-792. doi. 10.2307/1951053

Sonin, K. (2010). Provincial protectionism. Journal of Comparative Economics, 38(2), 111-122. doi. 10.1016/j.jce.2009.04.009

Swaan, A. de. (1973). Coalition Theories and Cabinet Formations. Elsevier, Amsterdam; North Holland.

Thies, M.F. (2001). Keeping tabs on partners: The logic of delegation in coalition governments, American Journal of Political Science, 45(3), 580-598. doi. 10.2307/2669240

Tiebout, C. (1956). A pure theory of local expenditures, Journal of Political Economy, 64(5), 416-424. doi. 10.1086/257839

Tommasi, M., & Weinschelbaum, F. (2007). Centralization vs. decentralization: a principal-agent analysis. Journal of Public Economic Theory, 9(2), 369-389. doi. 10.1111/j.1467-9779.2007.00311.x

Treisman, D. (2007). The Architecture of Government. Cambridge: Cambridge University Press.

Van Deemen, A. (1989). Dominant players and minimum size coalitions. European Journal of Political Research, 17(3), 313-332. doi. 10.1111/j.1475-6765.1989.tb00196.x

Vries, M. de. (1999). Governing with your Closest Neighbour: An Assessment of Spatial Coalition Formation Theories. Katholieke Universiteit Nijmegen.




DOI: http://dx.doi.org/10.1453/jsas.v9i3.2376

Refbacks

  • There are currently no refbacks.




....................................................................................................................................................................................................................................................................................................................................... Journal of Social and Administrative Sciences - J. Adm. Soc. Sci. - JSAS - www.kspjournals.org

ISSN: 2149-0406

Editor: editor-jsas@kspjournals.org   Secretarial: secretarial@kspjournals.org   Istanbul - Turkey.

Copyright © KSP Library