Political Fragmentation and Government Stability: Evidence from Local Governments in Spain

Felipe Carozzi, Davide Cipullo and Luca Repetto

American Economic Journal: Applied Economics, 2022, vol. 14, issue 2, 23-50

Abstract: This paper studies how political fragmentation affects government stability. Using a regression discontinuity design, we show that each additional party with representation in the local parliament increases the probability that the incumbent government is unseated by 5 percentage points. The entry of an additional party affects stability by reducing the probability of a single-party majority and increasing the instability of governments when such a majority is not available. We interpret our results in light of a bargaining model of coalition formation featuring government instability.

JEL-codes: C78 D72 H70 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (8)

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DOI: 10.1257/app.20200128

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