A Median Voter Theorem for Proportional Representation Systems with Firm Preelectoral Coalitions

We define the stable set of a party formation game with farsighted citizen candidates under proportional representation. Voters are sincere, parties are identified with candidate positions and can enter firm preelectoral coalitions. A coalition government is associated with a lottery over the ideal positions of its constituent parties. If preferences are strictly concave, in every outcome in the unique farsighted stable set the candidate representing the median voter wins the election as a singleton.

JEL classifications: C72, D72; Keywords: Median Voter, Proportional Representation, Endogenous Political Parties, Farsighted Stable Set LINK

Strategic Constitutional Choice in Autocracy

In a spatial model of political bargaining we show that there exists a constitution which a sufficiently patient autocrat would want to design and the parties forming a succeeding constitutional assembly would accept as a basis for negotiations on constitutional reform. That the middle class is opposed to redistribution strengthens the case for handing down a constitution and is a sufficient condition for the autocrat's constitution to be efficient. Increases in middle class wealth make constitution writing more attractive unless taxation is “too effective” in redistributing wealth. We relate our findings to the so-called "Pinochet Constitution" in Chile. With Katja Michalak. PDFile

Sequencing in Customs Union Formation: Theory and Application to the Eurasian Economic Union, Journal of Economic Integration 32, 2017:65-89.

The model of economic integration introduced by Aghion, Atràs, Helpman (2007) predicts that if there is a dominant country in the integration process it will offer sequential negotiations rather than multilateral negotiations when so doing enables it to exploit negative externalities on coun-tries which join the integration project at a later stage. We demonstrate that this result hinges on exogenous restrictions on the bargaining protocol. In the absence of such restrictions, observed delay in customs union formation requires imperfections such as bargaining frictions, myopia of the joining country, imperfect commitment or uncertain political succession. We find that an extension of the AAH model along these lines better explains observed details of the formation of Eurasian Customs Union.   With Aidos Alimbekov and Eldar Madumarov

JEL classifications: C78, F15; Keywords: Regional Integration, Sequencing, Customs Union, Bargaining
Journal Article  Unpublished Appendix  Raw Data Set

Intra-party decision making, party formation, and moderation in multiparty systems, in: Mathematical Social Sciences 63, 2012: 14-22.

We establish coalitional stable party structures of a party formation game in an elected assembly. Farsighted political players can commit to form parties and to vote on policies according to the party position which is determined by intra-party majority rule. Parties may form governments and block proposals by a randomly selected member of the government. If the government recognition rule allows for the formation of multiparty governments, the median parliamentarian either realizes her ideal point or a policy lottery which she strictly prefers to the status quo. This outcome is enforced by the threat of forming a moderating centre party.

JEL classification C72, D71, D78; Keywords: Endogenous political parties, intraparty decision rules, farsighted coalitional stability, political institutions.
LINK to Journal Article   LINK to working paper.

Intra-party decision making, party formation, and moderation in multiparty systems: Details of the examples

This working paper provides details of the examples of the paper "Intra-party decision making, party formation and moderation in multiparty systems.

LINK to paper   LINK to excel table 1   LINK to excel table 2

Coalition Governments versus Minority Governments: Bargaining Power, Cohesion and Budgeting Outcomes, in: Public Choice 121, nos. 1-2, 2004, 1-24.

Recent empirical work investigating the role of minority governments in the selection of fiscal policies has shown that the majority status does not affect the budget size. This paper presents an analytical framework which accounts for this result. It combines a government formation game and a budget game involving cabinet and parliament. A general indifference result applies. An exogenous shock to the bargaininig environment which absorbes the cohesion of the government increases the demand for expenditures. At the same time the conditions for the formation of a minority government are fulfilled. If the formateur is strong, a minority government can be a device for cutting expenditures.

JEL classification D72; H61; Keywords: Budgeting, Legislative bargaining LINK.


04.04.2007; (C) 2000 by Gerald Pech