Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/233352 
Year of Publication: 
2021
Series/Report no.: 
Discussion paper No. 137
Publisher: 
Aboa Centre for Economics (ACE), Turku
Abstract: 
The composition of governing coalitions does not always reflect the relative sizes of the coalition members, but research has not been able to fully reconcile why. We propose that political parties with more (reelected) incumbent representatives fare better in coalitional bargaining. To evaluate this argument empirically, we construct a data set of parties and governing coalitions in Finnish local governments. Using an instrumental variable strategy that hinges on within-party close elections between incumbents and non-incumbents, we find that, ceteris paribus, having more re-elected incumbents improves a party s coalitional bargaining outcomes. Descriptive evidence suggests that incumbent representation is particularly useful when a party is in a disadvantaged position (e.g., it is ideologically distant from other parties) and when the bargaining environment is more complex (e.g., there are more parties). Lastly, incumbent representation also matters for selection: parties that have more incumbent representatives nominate more incumbents in the municipal executive.
Subjects: 
coalitional bargaining
coalitions
government formation
incumbency advantage
local government
multi-party system
JEL: 
C26
D72
Document Type: 
Working Paper

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