Coalition Inclusion Probabilities: A Dynamic Measure of Party Competitiveness and Cabinet Leverage

The paper that Mark Kayser will be presenting is co-authored by Matthias Orlowski (Humboldt University, Berlin) and Jochen Rehmert (Hertie School of Governance, Berlin).

Synopsis:  Policies are made with one eye cast to the future. As policy is most strongly influenced from within government, coalition inclusion prospects would seem predictive of the behavior of office- or policy-seeking parties. But, oddly, coalition models are poorly designed for empirical prediction. Most theoretical models rely predominantly on seat shares and ideological distance while empirical work tells us that other variables such as coalition history and anti-system parties matter as much; most empirical models predict coalition composition rather than individual parties’ coalition probabilities; neither calculate bargaining leverage between elections and neither test their predictions out of sample. We do. Combining empirical coalition formation models and a large set of political polls, we estimate coalition inclusion probabilities for parties in a sample of 20 parliamentary democracies at a monthly frequency over four decades. The probability of entering or remaining in an alternative government – i.e., bargaining leverage – serves as a strong predictor of party behavior, markedly superior to polls or expected seat shares. We demonstrate our measure’s utility with applications to no-confidence motions and financial policy reform.