Working Paper Series,
Research Institute of Industrial Economics

Abstract: The increasing electoral success of populist radical-right parties poses a significant challenge to established political parties in Western democracies. While mainstream parties often maintain a policy of non-cooperation with these newcomers, such cordon sanitaire strategies can become increasingly costly as radical parties gain support. This study examines the conditions under which established parties abandon their exclusionary stance, focusing on the case of the Sweden Democrats in Swedish municipal politics. We adapt time-series econometric methods to identify unknown thresholds at which exclusion costs become untenable, leading to shifts in coalition formation strategies. Our analysis reveals a critical threshold at approximately 19% electoral support, beyond which the probability of Sweden Democrats’ inclusion in governing coalitions significantly increases. We demonstrate that as radical party support approaches this threshold, coalition sizes expand, office rents are redistributed, and the ideological dispersion of governing parties widens. Once the threshold is surpassed, these trends reverse. Our findings highlight the trade-offs mainstream parties face in responding to the rise of challenger parties and contribute to broader debates on coalition formation, party system change, and the accommodation of anti-establishment parties in democratic systems.

Keywords: Coalition formation; Cordon sanitaire; Populist radical right; Sweden Democrats

JEL-codes: D72; P16

Language: English

60 pages, November 15, 2024

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