Coalition preclusion contracts and moderate policies

Hans Gersbach, Maik Schneider and Oriol Tejada

Games and Economic Behavior, 2019, vol. 114, issue C, 28-46

Abstract: We examine the effects of a novel political institution called Coalition Preclusion Contracts (CPCs) on the functioning of parliamentary democracies with proportional representation. CPCs enable political parties to credibly exclude one or several parties from the range of government coalitions they are prepared to envisage after elections. We consider a simple political game with a two-dimensional policy space in which three parties compete to form the government. We find that CPCs with a one-party exclusion rule defend the interests of the majority by precluding coalition governments that would include so-called extreme parties. This translates into moderation of the policies implemented and yields welfare gains for a large set of parameter values. We discuss the robustness of the results in more general settings and study how party-exclusion rules have to be adjusted when more than three parties compete in an election.

Keywords: Coalition formation; Political contracts; Elections; Government formation (search for similar items in EconPapers)
JEL-codes: D72 D82 H55 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825618301684
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Coalition Preclusion Contracts and Moderate Policies (2016)
Working Paper: Coalition-Preclusion Contracts and Moderate Policies (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:114:y:2019:i:c:p:28-46

DOI: 10.1016/j.geb.2018.10.005

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Catherine Liu ().