Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2020:1: Divided They Fall: Fragmented Parliaments and Government Stability

Luca Repetto (), Davide Cipullo () and Felipe Carozzi ()
Additional contact information
Luca Repetto: Department of Economics, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Davide Cipullo: Department of Economics, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Felipe Carozzi: Department of Geography and Environment, Postal: London School of Economics and Political Science, Houghton Street, London, WC2A 2AE, UK

Abstract: This paper studies how political fragmentation affects government stability. We show that each additional party with representation in Parliament increases the probability that the incumbent government is unseated by 4 percentage points. Governments with more resources at their disposal for bargaining are less likely to be replaced. When they are, new government leaders are younger and better educated, suggesting instability may induce positive selection. We interpret our results in light of a bargaining model of coalition formation featuring government instability. Our findings indicate that the rising fragmentation in parliaments worldwide may have a substantial impact on stability and political selection.

Keywords: Government Stability; Fragmentation; No-confidence votes; Bargaining; Alignment effect

JEL-codes: H10; H70; R50

67 pages, January 1, 2020

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