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Political fragmentation and government stability: evidence from local governments in Spain

Carozzi, Felipe, Cipullo, Davide and Repetto, Luca (2022) Political fragmentation and government stability: evidence from local governments in Spain. American Economic Journal: Applied Economics, 14 (2). 23 - 50. ISSN 1945-7782

[img] Text (Political Fragmentation and Government Stability) - Accepted Version
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Identification Number: 10.1257/app.20200128

Abstract

This paper studies how political fragmentation affects government stability. Using a regression discontinuity design, we show that each additional party with representation in the local parliament increases the probability that the incumbent government is unseated by 5 percentage points. The entry of an additional party affects stability by reducing the probability of a single-party majority and increasing the instability of governments when such a majority is not available. We interpret our results in light of a bargaining model of coalition formation featuring government instability.

Item Type: Article
Official URL: https://www.aeaweb.org/journals/app
Additional Information: © 2022 American Economic Association
Divisions: Geography & Environment
Subjects: J Political Science > JN Political institutions (Europe)
J Political Science > JS Local government Municipal government
JEL classification: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory; Matching Theory
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H70 - General
Date Deposited: 02 Mar 2021 15:27
Last Modified: 14 Jun 2022 11:15
URI: http://eprints.lse.ac.uk/id/eprint/108934

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