Coalition-Preclusion Contracts and Moderate Policies

Hans Gersbach, Oriol Tejada and Maik Schneider

No 14/195, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: We examine the effects of a novel political institution, which we call Coalition- Preclusion Contracts, on elections, policies, and welfare. Coalition-Preclusion Contracts enable political parties to credibly commit before the elections not to form a coalition after the elections with one or several other parties specified in the contract. We consider a political game in which three parties compete to form the government and study when contracts of the above type will be written. We find that in most circumstances Coalition-Preclusion Contracts with a single-party exclusion rule defend the interests of the majority by moderating the policies implemented. Moreover, they yield 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)
Pages: 62 pages
Date: 2014-04
New Economics Papers: this item is included in nep-cdm, nep-gth and nep-pol
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Related works:
Journal Article: Coalition preclusion contracts and moderate policies (2019)
Working Paper: Coalition Preclusion Contracts and Moderate Policies (2016)
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