Political fragmentation and government stability: evidence from local governments in Spain
Felipe Carozzi, Davide Cipullo and Luca Repetto
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.
1 April 2022
American Economic Journal: Applied Economics 14(2) , pp.23-50, 2022
https://www.aeaweb.org/articles?id=10.1257/app.20200128
This Journal article is published under the centre's Urban programme.