Elections, Governments, and Parliaments in Proportional Representation Systems

Elections, Governments, and Parliaments in Proportional Representation Systems

By
David P. Baron, Daniel Diermeier
Quarterly Journal of Economics. August
2001, Vol. 116, Issue 3, Pages 933-967

This paper presents a theory of parliamentary systems with a proportional representation electoral system, a formateur selected based on party representation in parliament, and parties that cannot commit to the policies they will implement once in government. Government formation involves efficient proto-coalition bargaining, and elections yield unique strong Nash equilibrium outcomes. Depending on the status quo, minimal-majority, surplus, or consensus governments can form. If parties and voters are myopic and the status quo is subject to shocks, consensus governments and centrist policies occur only in a crisis. Otherwise, governments are minimal winning, and policies reflect only the preferences of the government parties.