Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171638
Authors: 
Gersbach, Hans
Schneider, Maik T.
Tejada, Oriol
Year of Publication: 
2014
Series/Report no.: 
Economics Working Paper Series 14/195
Abstract: 
We examine the effects of a novel political institution, which we call Coalition- Preclusion Contracts, on elections, policies, and welfare. Coalition-Preclusion Contracts enable political parties to credibly commit before the elections not to form a coalition after the elections with one or several other parties specified in the contract. We consider a political game in which three parties compete to form the government and study when contracts of the above type will be written. We find that in most circumstances Coalition-Preclusion Contracts with a single-party exclusion rule defend the interests of the majority by moderating the policies implemented. Moreover, they yield welfare gains for a large set of parameter values. We discuss the robustness of the results in more general settings and study how party-exclusion rules have to be adjusted when more than three parties compete in an election.
Subjects: 
coalition formation
political contracts
elections
government formation
JEL: 
D72
D82
H55
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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